Document:

exv4w1

Exhibit 4.1

FIRST AMENDMENT TO RIGHTS AGREEMENT

          This First Amendment, dated as of September 14, 2009 (this “Amendment”), to the
Rights Agreement, dated as of October 5, 2000 (the “Company Rights Agreement”), between Parallel
Petroleum Corporation, a Delaware corporation (the “Company”), and Computershare Trust Company,
N.A., a federally chartered trust company, successor in interest to Computershare Trust Company,
Inc., as rights agent (the “Rights Agent”).

RECITALS

          WHEREAS, PLLL Holdings, LLC, a Delaware limited liability company (“Parent”), PLLL Acquisition
Co., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger Subsidiary”) and the
Company contemplate entering into an Agreement and Plan of Merger (the “Merger Agreement”) pursuant
to which it is proposed that, among other things, (i) Merger Subsidiary will make a cash tender
offer to acquire all the issued and outstanding shares of common stock, par value $0.01 per share,
of the Company, including the associated preferred stock purchase rights issued pursuant to the
Company Rights Agreement (as it may be amended from time to time, the “Offer”), and (ii) following
the consummation of the Offer and the satisfaction or waiver of certain conditions, the Merger
Subsidiary will merge with and into the Company (the “Merger”).

          WHEREAS, pursuant to Section 27 of the Company Rights Agreement, for so long as the Rights are
redeemable, the Company may, and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of the Company Rights Agreement without the approval of any holders of the
certificates representing shares of Common Stock.

          WHEREAS, the Company desires to amend the Company Rights Agreement to render the Rights
inapplicable to the Merger Agreement, the Offer, the Merger and the other transactions specifically
contemplated by the Merger Agreement.

          WHEREAS, the Board of Directors of the Company has determined that it is in the best interests
of the Company and its stockholders to amend the Company Rights Agreement as set forth below and
has approved this Amendment and authorized its appropriate officers to execute and deliver the same
to the Rights Agent.

AGREEMENT

          NOW, THEREFORE, for good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties hereto agree as follows:

	1.	 	Capitalized Terms. All capitalized, undefined terms used in this Amendment shall have
the meanings assigned thereto in the Company Rights Agreement.
	 
	2.	 	Amendments.

	 	a.	 	The definition of “Acquiring Person” set forth in Section 1(a) of the Company
Rights Agreement is hereby amended by adding the following sentences to the end of such
Section 1(a):

“Notwithstanding anything in this Agreement to the contrary, none of PLLL
Holdings, LLC, a Delaware limited liability company (“Parent”), PLLL Acquisition

 

Co., a Delaware corporation and a wholly-owned subsidiary of Parent (“Merger
Subsidiary”), or any of their respective Affiliates or Associates shall be
deemed to be an Acquiring Person, either individually or collectively, by virtue
of or as a result of (i) the approval, execution or delivery of the Agreement
and Plan of Merger (as the same may be amended from time to time, the “Merger
Agreement”), dated as of September 15, 2009, among the Company, Parent and
Merger Subsidiary, or the approval, execution and/or delivery of any amendment
thereto, (ii) the making or consummation of the tender offer to acquire all of
the outstanding shares of Common Stock, including the associated Rights, to be
commenced by the Merger Subsidiary pursuant to, and on the terms and subject to
the conditions set forth in, the Merger Agreement (such tender offer, as it may
be amended and/or extended from time to time pursuant to the terms of the Merger
Agreement, is referred to in this Agreement as the “Offer”), including the
acquisition of shares pursuant to the Offer under the Merger Agreement, (iii)
the consummation of the merger of Merger Subsidiary with and into the Company on
the terms, and subject to the conditions set forth in, the Merger Agreement
(such merger is referred to in this Agreement as the “Merger”), (iv) the
consummation of any other transactions contemplated by the Merger Agreement, or
(v) the announcement of any of the Merger Agreement, the Offer, the Merger or
any other transactions contemplated by the Merger Agreement. However, (i) if the
Merger Agreement is terminated prior to the Effective Time (as defined in the
Merger Agreement), then the immediately preceding sentence shall be of no
further force and effect and (ii) unless approved by the Company’s Board of
Directors, the immediately preceding sentence shall not apply to any purchases
of shares of Common Stock prior to the Effective Time (as defined in the Merger
Agreement) by Parent, Merger Subsidiary or any of their respective Affiliates or
Associates other than pursuant to the Merger Agreement.”

	 	b.	 	The definition of “Stock Acquisition Date” set forth in Section 1(kk) of the
Company Rights Agreement is hereby amended by adding the following sentence to the end of
such Section 1(kk):

“Notwithstanding anything in this Agreement to the contrary, no Stock
Acquisition Date shall occur or be deemed to have occurred by virtue of or as a
result of (i) the approval, execution or delivery of the Merger Agreement, or
the approval, execution or delivery of any amendment thereto, (ii) the making or
consummation of the Offer, including the acquisition of shares pursuant to the
Offer under the Merger Agreement, (iii) the consummation of the Merger, (iv) the
consummation of any other transactions contemplated by the Merger Agreement, or
(v) the announcement of any of the Merger Agreement, the Offer, the Merger or
any other transactions contemplated by the Merger Agreement.”

	 	c.	 	Section 2 of the Company Rights Agreement is hereby amended by adding the following
language to the end of the second sentence thereof:

“, upon ten (10) days’ prior written notice to the Rights Agent. The Rights
Agent shall have no duty to supervise, and shall in no event be liable for, the
acts or omissions of any such Co-Rights Agent.”

	 	d.	 	Section 3(a) of the Company Rights Agreement is hereby amended by adding the
following language to the end of the first sentence of Section 3(a):

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“; notwithstanding anything in this Agreement to the contrary, no Distribution
Date shall occur or be deemed to have occurred by virtue of or as a result of
(i) the approval, execution or delivery of the Merger Agreement, or the
approval, execution or delivery of any amendment thereto, (ii) the making or
consummation of the Offer, including the acquisition of shares pursuant to the
Offer under the Merger Agreement, (iii) the consummation of the Merger, (iv) the
consummation of any other transactions contemplated by the Merger Agreement, or
(v) the announcement of any of the Merger Agreement, the Offer, the Merger or
any other transactions contemplated by the Merger Agreement”

	 	e.	 	Section 7(e) of the Company Rights Agreement is hereby amended by adding the
following sentence at the end thereof:

“Notwithstanding anything in this Agreement to the contrary, the provisions of
this Section 7(e) shall not apply by virtue of or as a result of (i) the
approval, execution or delivery of the Merger Agreement, or the approval,
execution and/or delivery of any amendment thereto, (ii) the making or
consummation of the Offer, including the acquisition of shares pursuant to the
Offer under the Merger Agreement, (iii) the consummation of the Merger, (iv) the
consummation of any other transactions contemplated by the Merger Agreement, or
(v) the announcement of any of the Merger Agreement, the Offer, the Merger or
any other transactions contemplated by the Merger Agreement.”

	 	f.	 	Section 11 of the Company Rights Agreement is hereby amended by adding the
following provision at the end of such section as a new subsection 11(q):

“(q) Exceptions. Notwithstanding anything in this Agreement to the contrary,
the provisions of Section 11 shall not apply, and no adjustments shall be made
pursuant to this Section 11, by virtue of or as a result of (i) the approval,
execution or delivery of the Merger Agreement, or the approval, execution and/or
delivery of any amendment thereto, (ii) the making or consummation of the Offer,
including the acquisition of shares pursuant to the Offer under the Merger
Agreement, (iii) the consummation of the Merger, (iv) the consummation of any
other transactions contemplated by the Merger Agreement, or (v) the announcement
of any of the Merger Agreement, the Offer, the Merger or any other transactions
contemplated by the Merger Agreement.”

	 	g.	 	Section 13 of the Company Rights Agreement is hereby amended by adding the
following provision at the end of such section as a new section (e):

“(e) Additional Exceptions. Notwithstanding anything in this Agreement to the
contrary, this Section 13 (Consolidation, Merger or Sale or Transfer of Assets
or Earning Power) shall not be applicable to (i) the approval, execution or
delivery of the Merger Agreement, or the approval, execution and/or delivery of
any amendment thereto, (ii) the making or consummation of the Offer, including
the acquisition of shares pursuant to the Offer under the Merger Agreement,
(iii) the consummation of the Merger, (iv) the consummation of any other
transactions contemplated by the Merger Agreement, or (v) the announcement of
any of the Merger Agreement, the Offer, the Merger or any other transactions
contemplated by the Merger Agreement.”

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	 	h.	 	Section 21 of the Company Rights Agreement is hereby amended by deleting the first
sentence in its entirety and replacing it with the following:

“The Rights Agent or any successor Rights Agent may resign and be discharged
from its duties under this Agreement upon thirty (30) calendar days’ notice in
writing mailed to the Company, and to each transfer agent of the Common Stock
and Preferred Stock to the extent that such transfer agent is a Person other
than the Rights Agent or any of the Rights Agent’s Affiliates. In the event the
transfer agency relationship in effect between the company and the Rights Agent
or any of the Rights Agent’s Affiliates terminates, the Rights Agent will be
deemed to have resigned automatically and be discharged from its duties under
this Agreement as of the effective date of such termination, and the Company
shall be responsible for sending any required notice.”

	 	i.	 	Section 25 of the Company Rights Agreement is hereby amended by adding the
following provision at the end of such section as a new subsection (c):

“(c) Exceptions. Notwithstanding anything in this Agreement to the contrary,
the Company shall not be required to give any notice contemplated by this
Section 25 by virtue of or as a result of (i) the approval, execution or
delivery of the Merger Agreement, or the approval, execution and/or delivery of
any amendment thereto, (ii) the making or consummation of the Offer, including
the acquisition of shares pursuant to the Offer under the Merger Agreement,
(iii) the consummation of the Merger, (iv) the consummation of any other
transactions contemplated by the Merger Agreement, or (v) the announcement of
any of the Merger Agreement, the Offer, the Merger or any other transactions
contemplated by the Merger Agreement.”

	 	j.	 	Section 26 of the Company Rights Agreement is hereby amended by deleting the Rights
Agent notice address in its entirety and replacing it with the following:

“Computershare Trust Company, N.A.

350 Indiana Street, Suite 750

Golden, Colorado 80401

Attention: Client Services

Facsimile: 303-262-0609”

	 	k.	 	Section 30 of the Company Rights Agreement is hereby amended by adding the
following sentence at the end thereof:

“Further, nothing in this Agreement shall be construed to give any holder of
Rights or any other person, firm, corporation, partnership or other entity any
legal or equitable rights, remedies or claims under this Agreement by virtue of
or as a result of (i) the approval, execution or delivery of the Merger
Agreement, or the approval, execution and/or delivery of any amendment thereto,
(ii) the making or consummation of the Offer, including the acquisition of
shares pursuant to the Offer under the Merger Agreement, (iii) the consummation
of the Merger, (iv) the consummation of any other transactions contemplated by
the Merger Agreement, or (v) the announcement of any of the Merger Agreement,
the Offer, the Merger or any other transactions contemplated by the Merger
Agreement.”

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	 	l.	 	The Company Rights Agreement is hereby amended to add a new Section 35 to the end
thereof, as follows:

“Section 35. Force Majeure. Notwithstanding anything to the contrary contained
herein, the Rights Agent shall not be liable for any delays or failures in
performance resulting from acts beyond its reasonable control including, without
limitation, acts of God, terrorist acts, shortage of supply, breakdowns or
malfunctions, interruptions or malfunction of computer facilities, or loss of
data due to power failures or mechanical difficulties with information storage
or retrieval systems, labor difficulties, war, or civil unrest.”

	 	3.	 	Governing Law. This Amendment shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such state applicable to contracts to be made and performed
entirely within such state.
	 
	 	4.	 	Counterparts; Electronic Transmission. This Amendment may be executed and
delivered by facsimile, PDF or similar electronic transmission method in any number of
counterparts and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute but one and the same
instrument.
	 
	 	5.	 	Authority. Each party represents that such party has full power and authority
to enter into this Amendment and that this Amendment constitutes a legal, valid and binding
obligation of such party, enforceable against such party in accordance with its terms.
	 
	 	6.	 	Successors and Assigns. All of the covenants and provisions of this Amendment
by or for the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns.
	 
	 	7.	 	Benefits of this Amendment. Nothing in this Amendment shall be construed to
give to any person, firm, corporation, partnership or other entity other than the Company,
the Parent, the Merger Subsidiary, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Shares) any legal or equitable
right, remedy or claim under this Amendment; but this Amendment shall be for the sole and
exclusive benefit of the Company, the Parent, the Merger Subsidiary, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution Date, the
Shares).
	 
	 	8.	 	Severability. If any term, provision, covenant or restriction of this Amendment
is held by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants and restrictions of this
Amendment shall remain in full force and effect and shall in no way be affected, impaired
or invalidated.
	 
	 	9.	 	Effectiveness. This Amendment shall be effective as of the date first written
above and shall be deemed effective prior to, and shall be subject to, the execution and
delivery of the Merger Agreement; provided, however, that this Amendment shall be null and
void, automatically terminate and be of no further force or effect on the date on which the
Merger Agreement is terminated in accordance with its terms. In the event this Amendment
is deemed null and void due to the termination of the Merger Agreement, the Company shall
provide the Rights Agent with notice of such termination promptly thereafter. Except as
and to the extent expressly modified by this Amendment, the Company Rights Agreement and
the exhibits thereto, shall remain in full force and effect in all respects. In the event
of a conflict or inconsistency between

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	 	 	 	this Amendment and the Company Rights Agreement and the exhibits thereto, the provisions of
this Amendment shall govern.

	 	10.	 	Certification. The Company hereby certifies to the Rights Agent that this
Amendment is in compliance with Section 27 of the Company Rights Agreement.

[Signature Page Follows]

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          IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed as of
the day and year first above written.

	 	 	 	 	 	 	 	 	 
	 	 	PARALLEL PETROLEUM CORPORATION
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	By:
	 	/s/ Jeffrey G. Shrader
 

	 	 
	 
	 	 	 	Name:
	 	Jeffrey G. Shrader	 	 
	 
	 	 	 	Title:
	 	Chairman	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	COMPUTERSHARE TRUST COMPANY, N.A.
	 
	 	 	 	 	 	 	 	 
	 
	 	 	 	By:
	 	/s/ Kellie Gwinn
 

	 	 
	 
	 	 	 	Name:
	 	Kellie Gwinn	 	 
	 
	 	 	 	Title:
	 	Vice President	 	 

Signature Page to First Amendment to the Rights Agreementexv10w1

EXHIBIT
10.1

Anthera Pharmaceuticals, Inc.

2005 Equity Incentive Plan

As Amended September 8, 2006

1.       Purposes.

          (a)       Eligible Stock Award Recipients. The persons eligible to receive Stock Awards are
Employees, Directors and Consultants.

          (b)       Available Stock Awards. The purpose of the Plan is to provide a means by which eligible
recipients of Stock Awards may be given an opportunity to benefit from increases in value of the
Common Stock through the granting of the following Stock Awards: (i) Incentive Stock Options, (ii)
Nonstatutory Stock Options, (iii) Restricted Stock Awards and (iv) Stock Appreciation Rights.

          (c)       General Purpose. The Company, by means of the Plan, seeks to retain the services of the
group of persons eligible to receive Stock Awards, to secure and retain the services of new members
of this group and to provide incentives for such persons to exert maximum efforts for the success
of the Company and its Affiliates.

2.       Definitions.

          (a)       “Affiliate” means any parent corporation or subsidiary corporation of the Company, whether
now or hereafter existing, as those terms are defined in Sections 424(e) and
(f), respectively, of the Code.

          (b)       “Board” means the Board of Directors of the Company.

          (c)       “Capitalization Adjustment” has the meaning ascribed to that term in Section 11(a).

          (d)       “Change in Control” means the occurrence, in a single transaction or in a series of
related transactions, of anyone or more of the following events:

                     (i)       any Exchange Act Person becomes the Owner, directly or indirectly, of securities of the
Company representing more than fifty percent (50%) of the combined voting power of the Company’s
then outstanding securities other than by virtue of a merger, consolidation or similar transaction;

                     (ii)      there is consummated a merger, consolidation or similar transaction involving (directly
or indirectly) the Company if, immediately after the consummation of such merger, consolidation or
similar transaction, the stockholders of the Company immediately prior thereto do not Own, directly
or indirectly, either (A) outstanding voting securities representing
more than fifty percent (50%) of the combined outstanding voting power of the surviving Entity in
such merger, consolidation or similar transaction or (B) more than fifty percent (50%) of the

 

 

combined outstanding voting power of the parent of the surviving Entity in such merger,
consolidation or similar transaction;

                     (iii)     the stockholders of the Company approve or the Board approves a plan of complete
dissolution or liquidation of the Company, or a complete dissolution or liquidation of the Company
shall otherwise occur; or

                     (iv)     there is consummated a sale, lease, license or other disposition of all or substantially
all of the consolidated assets of the Company and its Subsidiaries, other than a sale, lease,
license or other disposition of all or substantially all of the consolidated assets of the Company
and its Subsidiaries to an Entity, more than fifty percent (50%) of the combined voting power of
the voting securities of which are Owned by stockholders of the Company in substantially the same
proportion as their Ownership of the Company immediately prior to such sale, lease, license or
other disposition.

                     The term Change in Control shall not include a sale of assets, merger or other transaction
effected exclusively for the purpose of changing the domicile of the Company.

                     Notwithstanding the foregoing or any other provision of this Plan, the definition of Change in
Control (or any analogous term) in an individual written agreement between the Company or any
Affiliate and the Participant shall supersede the foregoing definition with respect to Stock Awards
subject to such agreement (it being understood, however, that if no definition of Change in Control
or any analogous term is set forth in such an individual written agreement, the foregoing
definition shall apply).

          (e)       “Code” means the Internal Revenue Code of 1986, as amended.

      (f)       “Committee” means a committee of one or more members of the Board appointed by the
Board in accordance with Section 3(c).

          (g)       “Common Stock” means the common stock of the Company.

          (h)       “Company” means Anthera Pharmaceuticals, Inc., a Delaware corporation.

          (i)       “Consultant” means any person, including an advisor, (i) engaged by the Company or an
Affiliate to render consulting or advisory services and who is compensated for such services or
(ii) serving as a member of the Board of Directors of an Affiliate and who is compensated for such
services. However, the term “Consultant” shall not include Directors who are not compensated by the
Company for their services as Directors, and the payment of a director’s fee by the Company for
services as a Director shall not cause a Director to be considered a “Consultant” for purposes of
the Plan.

          (j)       “Continuous Service” means that the Participant’s service with the Company or an
Affiliate, whether as an Employee, Director or Consultant, is not interrupted or terminated. A
change in the capacity in which the Participant renders service to the Company or an Affiliate as
an Employee, Consultant or Director or a change in the entity for which the Participant renders
such service, provided that there is no interruption or termination of the Participant’s service
with the Company or an Affiliate, shall not terminate a Participant’s Continuous Service. For

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example, a change in status from an employee of the Company to a consultant to an Affiliate or to
a Director shall not constitute an interruption of Continuous Service. The Board or the chief
executive officer of the Company, in that party’s sole discretion, may determine whether Continuous
Service shall be considered interrupted in the case of any leave of absence approved by that party,
including sick leave, military leave or any other personal leave. Notwithstanding the foregoing, a
leave of absence shall be treated as Continuous Service for purposes of vesting in a Stock Award
only to such extent as may be provided in the Company’s leave of absence policy or in the written
terms of the Participant’s leave of absence.

          (k)       “Corporate Transaction” means the occurrence, in a single transaction or in a series of
related transactions, of any one or more of the following events:

                     (i)       a sale or other disposition of all or substantially all, as determined by the Board in its
discretion, of the consolidated assets of the Company and its Subsidiaries;

                     (ii)     a sale or other disposition of at least ninety percent (90%) of the outstanding
securities of the Company;

                     (iii)     a merger, consolidation or similar transaction following which the
Company is not the surviving corporation; or

                     (iv)     a merger, consolidation or similar transaction following which the Company is the
surviving corporation but the shares of Common Stock outstanding immediately preceding the merger,
consolidation or similar transaction are converted or exchanged by virtue of the merger,
consolidation or similar transaction into other property, whether in the form of securities, cash
or otherwise.

          (l)       “Director” means a member of the Board.

          (m)      “Disability” means the inability of a person, in the opinion of a qualified physician
acceptable to the Company, to perform the major duties of that person’s position with the Company
or an Affiliate because of the sickness or injury of the person.

          (n)       “Employee” means any person employed by the Company or an Affiliate. Service as a Director
or payment of a director’s fee by the Company for such service or for service as a member of the
board of directors of an Affiliate shall not be sufficient to constitute “employment” by the
Company or an Affiliate.

          (o)       “Entity” means a corporation, partnership or other entity.

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

          (q)       “Exchange Act Person” means any natural person, Entity or “group” (within the meaning of
Section 13(d) or l4(d) of the Exchange Act), except that “Exchange Act Person” shall not include
(A) the Company or any Subsidiary of the Company, (B) any employee benefit plan of the Company or
any Subsidiary of the Company or any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any Subsidiary of the Company, (C) an underwriter
temporarily holding securities pursuant to an offering of such securities, or

3

 

(D) an Entity Owned, directly or indirectly, by the stockholders of the Company in substantially
the same proportion as their Ownership of stock of the Company.

          (r)       “Fair Market Value” means, as of any date, the value of the Common Stock determined in
good faith by the Board, and in a manner consistent with Section 260.140.50 of Title 10 of the
California Code of Regulations.

          (s)       “Incentive Stock Option” means an Option intended to qualify as an incentive stock option
within the meaning of Section 422 of the Code and the regulations promulgated thereunder.

          (t)       “Nonstatutory Stock Option” means an Option not intended to qualify as an Incentive Stock
Option.

          (u)       “Officer” means any person designated by the Company as an officer.

          (v)       “Option” means an Incentive Stock Option or a Nonstatutory Stock Option granted pursuant
to the Plan.

          (w)       “Option Agreement” means a written agreement between the Company and an Optionholder
evidencing the terms and conditions of an individual Option grant. Each Option Agreement shall be
subject to the terms and conditions of the Plan.

          (x)       “Optionholder” means a person to whom an Option is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Option.

          (y)       “Own,” “Owned,” “Owner,” “Ownership” A person or Entity shall be deemed to “Own,” to have
“Owned,” to be the “Owner” of, or to have acquired “Ownership” of securities if such person or
Entity, directly or indirectly, through any contract, arrangement, understanding, relationship or
otherwise, has or shares voting power, which includes the power to vote or to direct the voting,
with respect to such securities.

          (z)       “Participant” means a person to whom a Stock Award is granted pursuant to the Plan or, if
applicable, such other person who holds an outstanding Stock Award.

          (aa)     “Plan” means this Anthera Pharmaceuticals, Inc. 2005 Equity Incentive Plan.

          (bb)     “Restricted Stock Award” means an award of shares of Common Stock, which is granted
pursuant to the terms and conditions of Section 7(a).

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

          (dd)     “Stock Appreciation Right” means a right to receive the appreciation of Common Stock,
which is granted pursuant to the terms and conditions of Section 7(c).

          (ee)     “Stock Award” means any right granted under the Plan, including an Option, a Restricted
Stock Award and a Stock Appreciation Right.

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          (ff)     “Stock Award Agreement” means a written agreement between the Company and a holder of a
Stock Award evidencing the terms and conditions of an individual Stock Award grant. Each Stock
Award Agreement shall be subject to the terms and conditions of the Plan.

          (gg)    “Subsidiary” means, with respect to the Company, (i) any corporation of which more than
fifty percent (50%) of the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether, at the time, stock
of any other class or classes of such corporation shall have or might have voting power by reason
of the happening of any contingency) is at the time, directly or indirectly, Owned by the Company,
and (ii) any partnership in which the Company has a direct or indirect interest (whether in the
form of voting or participation in profits or capital contribution) of more than fifty percent
(50%).

          (hh)    “Ten Percent Stockholder” means a person who Owns (or is deemed to Own pursuant to
Section 424(d) of the Code) stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of the Company or of any of its Affiliates.

3.       Administration.

          (a)       Administration by Board. The Board shall administer the Plan unless and until the Board
delegates administration to a Committee, as provided in Section 3(c).

          (b)       Powers of Board. The Board shall have the power, subject to, and within the limitations
of, the express provisions of the Plan:

                     (i)       To determine from time to time which of the persons eligible under the
Plan shall be granted Stock Awards; when and how each Stock Award shall be granted; what type or
combination of types of Stock Award shall be granted; the provisions of each Stock Award granted
(which need not be identical), including the time or times when a person shall be permitted to
receive Common Stock pursuant to a Stock Award; and the number of shares of Common Stock with
respect to which a Stock Award shall be granted to each such person.

                     (ii)      To construe and interpret the Plan and Stock Awards granted under it, and to establish,
amend and revoke rules and regulations for its administration. The Board, in the exercise of this
power, may correct any defect, omission or inconsistency in the Plan or in any Stock Award
Agreement, in a manner and to the extent it shall deem necessary or expedient to make the Plan
fully effective.

                     (iii)     To effect, at any time and from time to time, with the consent of any adversely affected
Optionholders, (1) the reduction in the exercise price of any outstanding Options under the Plan
and/or (2) the cancellation of any outstanding Options under the Plan and the grant in substitution
therefor of new Options under the Plan covering the same or a different numbers of shares of Common
Stock. The exercise price per share of Common Stock shall be not less than that specified under the
Plan for newly granted Stock Awards except that the Board may grant an Option with a lower exercise
price if such Option is granted as part of a transaction to which Section 424(a) of the Code
applies.

                     (iv)     To amend the Plan or a Stock Award as provided in Section 12.

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                     (v)      To terminate or suspend the Plan as provided in Section 13.

                     (vi)     Generally, to exercise such powers and to perform such acts as the Board deems necessary
or expedient to promote the best interests of the Company and that are not in conflict with the
provisions of the Plan.

          (c)       Delegation to Committee. The Board may delegate administration of the Plan to a Committee
or Committees of one (1) or more members of the Board, and the term “Committee” shall apply to any
person or persons to whom such authority has been delegated. If administration is delegated to a
Committee, the Committee shall have, in connection with the administration of the Plan, the powers
theretofore possessed by the Board, including the power to delegate to a subcommittee any of the
administrative powers the Committee is authorized to exercise (and references in this Plan to the
Board shall thereafter be to the Committee or subcommittee), subject, however, to such resolutions,
not inconsistent with the provisions of the Plan, as may be adopted from time to time by the Board.
The Board may abolish the Committee at any time and revest in the Board the administration of the
Plan.

          (d)       Effect of Board’s Decision. All determinations, interpretations and constructions made by
the Board in good faith shall not be subject to review by any person and shall be final, binding
and conclusive on all persons.

4.       Shares Subject to the Plan.

          (a)       Share Reserve. Subject to the provisions of Section 11(a) relating to Capitalization
Adjustments, the Common Stock that may be issued pursuant to Stock Awards shall not exceed in the
aggregate two million six hundred twenty five thousand (2,625,000) shares of Common Stock.

          (b)       Reversion of Shares to the Share Reserve. If any Stock Award shall for any reason expire
or otherwise terminate, in whole or in part, without having been exercised in full, or if any
shares of Common Stock issued to a Participant pursuant to a Stock Award are forfeited back to or
repurchased by the Company, including, but not limited to, any repurchase or forfeiture caused by
the failure to meet a contingency or condition required for the vesting of such shares, then the
shares of Common Stock not acquired under such Stock Award shall revert to and again become
available for issuance under the Plan. If any shares subject to a Stock Award are not delivered to
a Participant because such shares are withheld for the payment of taxes or the Stock Award is
exercised through a reduction of shares subject to the Stock Award (i.e., “net exercised”), then
the number of shares that are not delivered shall revert to and again become available for issuance
under the Plan. If the exercise price of any Stock Award is satisfied by tendering shares of Common
Stock held by the Participant (either by actual delivery or attestation), then the number of such
tendered shares shall revert to and again become available for issuance under the Plan.
Notwithstanding the foregoing and subject to the provisions of Section 11(a) relating to
Capitalization Adjustments, the aggregate number of shares of Common Stock that may be issued as
Incentive Stock Options shall be five million (5,000,000) shares of Common Stock.

6

 

          (c)       Source of Shares. The shares of Common Stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.

          (d)       Share Reserve Limitation. To the extent required by Section 260.140.45 of Title 10 of the
California Code of Regulations, the total number of shares of Common Stock issuable upon exercise
of all outstanding Options and the total number of’ shares of Common Stock provided for under any
stock bonus or similar plan of the Company shall not exceed the applicable percentage as calculated
in accordance with the conditions and exclusions of Section 260.140.45 of Title 10 of the
California Code of Regulations, based on the shares of Common Stock of the Company that are
outstanding at the time the calculation is made.

5.       Eligibility.

          (a)       Eligibility for Specific Stock Awards. Incentive Stock Options may be granted only to
Employees. Stock Awards other than Incentive Stock Options may be granted to Employees, Directors
and Consultants.

          (b)       Ten Percent Stockholders.

                     (i)      A Ten Percent Stockholder shall not be granted an Incentive Stock Option unless the
exercise price of such Option is at least one hundred ten percent (110%) of the Fair Market Value
of the Common Stock on the date of grant and the Option is not exercisable after the expiration of
five (5) years from the date of grant.

                     (ii)     A Ten Percent Stockholder shall not be granted a Nonstatutory Stock Option unless the
exercise price of such Option is at least (i) one hundred ten percent (110%) of the Fair Market
Value of the Common Stock on the date of grant or (ii) such lower percentage of the Fair Market
Value of the Common Stock on the date of grant as is permitted by Section 260.140.41 of Title 10 of
the California Code of Regulations at the time of the grant of the Option.

                     (iii)     A Ten Percent Stockholder shall not be granted a Restricted Stock Award or Stock
Appreciation Right (if such award could be settled in shares of Common Stock), unless the purchase
price of the restricted stock is at least (i) one hundred percent (100%) of the Fair Market Value
of the Common Stock on the date of grant or (ii) such lower percentage of the Fair
Market Value of the Common Stock on the date of grant as is permitted by Section 260.140.42 of
Title 10 of the California Code of Regulations at the time of the grant of the award.

          (c)       Consultants. A Consultant shall not be eligible for the grant of a Stock Award if, at the
time of grant, either the offer or the sale of the Company’s securities to such Consultant is not
exempt under Rule 701 of the Securities Act (“Rule 701”) because of the nature of the services that
the Consultant is providing to the Company, because the Consultant is not a natural person, or
because of some other provision of Rule 701.

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6.       Option Provisions.

          Each Option shall be in such form and shall contain such terms and conditions as the Board
shall deem appropriate. All Options shall be separately designated Incentive Stock Options or
Nonstatutory Stock Options at the time of grant, and, if certificates are issued, a separate
certificate or certificates shall be issued for shares of Common Stock purchased on exercise of
each type of Option. The provisions of separate Options need not be identical, but each Option
shall include (through incorporation of provisions hereof by reference in the Option or otherwise)
the substance of each of the following provisions:

          (a)       Term. Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, no
Option shall be exercisable after the expiration of ten (10) years from the date it was granted.

          (b)       Exercise Price of an Incentive Stock Option. Subject to the provisions of Section 5(b)
regarding Ten Percent Stockholders, the exercise price of each Incentive Stock Option shall be not
less than one hundred percent (100%) of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, an Incentive Stock Option
may be granted with an exercise price lower than that set forth in the preceding sentence if such
Option is granted pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.

          (c)       Exercise Price of a Nonstatutory Stock Option. Subject to the provisions of Section 5(b)
regarding Ten Percent Stockholders, the exercise price of each Nonstatutory Stock Option shall be
not less than eighty-five percent (85%) of the Fair Market Value of the Common Stock subject to the
Option on the date the Option is granted. Notwithstanding the foregoing, a Nonstatutory Stock
Option may be granted with an exercise price lower than that set forth in the preceding sentence if
such Option is granted pursuant to an assumption or substitution for another option in a manner
satisfying the provisions of Section 424(a) of the Code.

          (d)       Consideration. The purchase price of Common Stock acquired pursuant to an Option shall be
paid, to the extent permitted by applicable statutes and regulations, either (i) in cash at the
time the Option is exercised or (ii) at the discretion of the Board at the time of the grant of the
Option (or subsequently in the case of a Nonstatutory Stock Option) (1) by delivery to the Company
of other Common Stock, (2) according to a deferred payment or other similar arrangement with the
Optionholder or (3) in any other form of legal consideration that may be acceptable to the Board.
Unless otherwise specifically provided in the Option, the purchase price of Common Stock acquired
pursuant to an Option that is paid by delivery to the Company of other Common Stock acquired,
directly or indirectly from the Company, shall be paid only by shares of the Common Stock of the
Company that have been held for more than six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes). At any time that the
Company is incorporated in Delaware, payment of the Common Stock’s “par value,” as defined in the
Delaware General Corporation Law, shall not be made by deferred payment.

8

 

          In the case of any deferred payment arrangement, interest shall be compounded at least
annually and shall be charged at the minimum rate of interest necessary to avoid (I) the treatment
as interest, under any applicable provisions of the Code, of any amounts other than amounts stated
to be interest under the deferred payment arrangement and (2) the treatment of the Option as a
variable award for financial accounting purposes.

          (e)       Transferability of an Incentive Stock Option. An Incentive Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.

          (f)       Transferability of a Nonstatutory Stock Option. A Nonstatutory Stock Option shall not be
transferable except by will or by the laws of descent and distribution and, to the extent provided
in the Option Agreement, to such further extent as permitted by Section 260.140.41(d) of Title 10
of the California Code of Regulations at the time of the grant of the Option, and shall be
exercisable during the lifetime of the Optionholder only by the Optionholder. If the Nonstatutory
Stock Option does not provide for transferability, then the Nonstatutory Stock Option shall not be
transferable except by will or by the laws of descent and distribution and shall be exercisable
during the lifetime of the Optionholder only by the Optionholder. Notwithstanding the foregoing,
the Optionholder may, by delivering written notice to the Company, in a form satisfactory to the
Company, designate a third party who, in the event of the death of the Optionholder, shall
thereafter be entitled to exercise the Option.

          (g)       Vesting Generally. The total number of shares of Common Stock subject to an Option may,
but need not, vest and therefore become exercisable in periodic installments that may, but need
not, be equal. The Option may be subject to such other terms and conditions on the time or times
when it may be exercised (which may be based on performance or other criteria) as the Board may
deem appropriate. The vesting provisions of individual Options may vary. The provisions of this
Section 6(g) are subject to any Option provisions governing the minimum number of shares of Common
Stock as to which an Option may be exercised.

          (h)       Minimum Vesting. Notwithstanding the foregoing Section 6(g), to the extent that the
following restrictions on vesting are required by Section 260.140.41(f) of Title 10 of the
California Code of Regulations at the time of the grant of the Option, then:

                     (i)      Options granted to an Employee who is not an Officer, Director or Consultant shall provide
for vesting of the total number of shares of Common Stock at a rate of at least twenty percent
(20%) per year over five (5) years from the date the Option was granted, subject to reasonable
conditions such as continued employment; and

                     (ii)     Options granted to Officers, Directors or Consultants may be made fully exercisable,
subject to reasonable conditions such as continued employment, at any time or during any period
established by the Company.

9

 

          (i)       Termination of Continuous Service. In the event that an Optionholder’s Continuous Service
terminates (other than upon the Optionholder’s death or Disability), the Optionholder may exercise
his or her Option (to the extent that the Optionholder was entitled to exercise such Option as of
the date of termination) but only within such period of time ending on the earlier of (i) the date
three (3) months following the termination of the Optionholder’s Continuous Service (or such longer
or shorter period specified in the Option Agreement, which period shall not be less than thirty
(30) days unless such termination is for cause), or (ii) the expiration of the term of the Option
as set forth in the Option Agreement. If, after termination, the Optionholder does not exercise his
or her Option within the time specified in the Option Agreement, the Option shall terminate.

          (j)       Extension of Termination Date. An Optionholder’s Option Agreement may also provide that
if the exercise of the Option following the termination of the Optionholder’s Continuous Service
(other than upon the Optionholder’s death or Disability) would be prohibited at any time solely
because the issuance of shares of Common Stock would violate the registration requirements under
the Securities Act, then the Option shall terminate on the earlier of (i) the expiration of the
term of the Option set forth in Section 6(a) or (ii) the expiration of a period of three (3) months
after the termination of the Optionholder’s Continuous Service during which the exercise of the
Option would not be in violation of such registration requirements.

          (k)       Disability of Optionholder. In the event that an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s Disability, the Optionholder may exercise his or her
Option (to the extent that the Optionholder was entitled to exercise such Option as of the date of
termination), but only within such period of time ending on the earlier of (i) the date twelve (12)
months following such termination (or such longer or shorter period specified in the Option
Agreement, which period shall not be less than six (6) months) or (ii) the expiration of the term
of the Option as set forth in the Option Agreement. If, after termination, the Optionholder does
not exercise his or her Option within the time specified herein, the Option shall terminate.

          (l)       Death of Optionholder. In the event that (i) an Optionholder’s Continuous Service
terminates as a result of the Optionholder’s death or (ii) the Optionholder dies within the period
(if any) specified in the Option Agreement after the termination of the Optionholder’s Continuous
Service for a reason other than death, then the Option may be exercised (to the extent the
Optionholder was entitled to exercise such Option as of the date of death) by the Optionholder’s
estate, by a person who acquired the right to exercise the Option by bequest or inheritance or by
a. person designated to exercise the option upon the Optionholder’s death pursuant to Section 6(e)
or 6(f), but only within the period ending on the earlier of (1) the date eighteen (18) months
following the date of death (or such longer or shorter period specified in the Option Agreement,
which period shall not be less than six (6) months) or (2) the expiration of the term of such
Option as set forth in the Option Agreement. If, after death, the Option is not exercised within
the time specified herein, the Option shall terminate.

          (m)       Early Exercise. The Option may, but need not, include a provision whereby the
Optionholder may elect at any time before the Optionholder’s Continuous Service terminates to
exercise the Option as to any part or all of the shares of Common Stock subject to the Option

10

 

prior to the full vesting of the Option. Subject to the “Repurchase Limitation” in Section
10(h), any unvested shares of Common Stock so purchased may be subject to a repurchase option in
favor of the Company or to any other restriction the Board determines to be appropriate. Provided
that the “Repurchase Limitation” in Section 10(h) is not violated, the Company will not exercise
its repurchase option until at least six (6) months (or such longer or shorter period of time
required to avoid a charge to earnings for financial accounting purposes) have elapsed following
exercise of the Option unless the Board otherwise specifically provides in the Option.

          (n)       Right of Repurchase. Subject to the “Repurchase Limitation” in Section 10(h), the Option
may, but need not, include a provision whereby the Company may elect to repurchase all or any part
of the vested shares of Common Stock acquired by the Optionholder pursuant to the exercise of the
Option. Provided that the “Repurchase Limitation” in Section 10(h) is not violated, the Company
will not exercise its repurchase option until at least six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting purposes) have
elapsed following exercise of the Option unless otherwise specifically provided in the Option.

          (o)       Right of First Refusal. The Option may, but need not, include a provision whereby the
Company may elect to exercise a right of first refusal following receipt of notice from the
Optionholder of the intent to transfer all or any part of the shares of Common Stock received upon
the exercise of the Option. Except as expressly provided in this Section 6(o) or in the Stock Award
Agreement for the Option, such right of first refusal shall otherwise comply with any applicable
provisions of the Bylaws of the Company. The Company will not exercise its right of first refusal
until at least six (6) months (or such longer or shorter period of time the exercise of the Option
unless otherwise specifically provided in the Option.

7.       Provisions of Stock Awards Other Than Options.

          (a)       Restricted Stock Awards. Each Restricted Stock Award shall be in such form and shall
contain such terms and conditions as the Board shall deem appropriate. The terms and conditions of
the Restricted Stock Award agreements may change from time to time, and the terms and conditions of
separate Restricted Stock Award agreements need not be identical; provided, however, that each
Restricted Stock Award agreement shall include (through incorporation of provisions hereof by
reference in the agreement or otherwise) the substance of each of the following provisions:

                     (i)      Purchase Price. At the time of grant of a Restricted Stock Award, the Board will determine
the price to be paid by the Participant for each share subject to the Restricted Stock Award.
Subject to the provisions of Section 5(b) regarding Ten Percent Stockholders, the price to be paid
by the Participant for each share subject to the Restricted Stock Award shall not be less than
eighty-five percent (85%) of the Common Stock’s Fair Market Value on the date such award is made or
at the time the purchase is consummated. A Restricted Stock Award may be awarded as a stock bonus
(i.e., with no cash purchase price to be paid) to the extent permissible under applicable law.

                     (ii)     Consideration. At the time of the grant of a Restricted Stock Award, the Board will
determined the consideration permissible for the payment of the purchase price of the

11

 

Restricted Stock Award. The purchase price of Common Stock acquired pursuant to the Restricted
Stock Award shall be paid in one of the following ways: (i) in cash at the time of purchase; (ii)
at the discretion of the Board, according to a deferred payment or other similar arrangement with
the Participant; (iii) by services rendered or to be rendered to the Company;
(iv) in any other form of legal consideration that may be acceptable to the Board; provided,
however, that at any time that the Company is incorporated in Delaware, then payment of the Common
Stock’s “par value,” as defined in the Delaware General Corporation Law, shall not be made by
deferred payment and must be paid in a form of consideration that is permissible under the Delaware
General Corporation Law.

                     (iii)     Vesting. Subject to the “Repurchase Limitation” in Section 10(h), shares of Common Stock
acquired under a Restricted Stock Award may, but need not, be subject to a share repurchase option
in favor of the Company in accordance with a vesting schedule to be determined by the Board.

                     (iv)     Termination of Participant’s Continuous Service. Subject to the “Repurchase Limitation”
in Section 10(h), in the event that a Participant’s Continuous Service terminates, the Company may
repurchase or otherwise reacquire any or all of the shares of Common Stock held by the Participant
that have not vested as of the date of termination under the terms of the Restricted Stock Award
agreement. Provided that the “Repurchase Limitation” in Section 10(h) is not violated, the Company
will not exercise its repurchase option until at least six (6) months (or such longer or shorter
period of time required to avoid a charge to earnings for financial accounting purposes) have
elapsed following the purchase of the restricted stock unless otherwise determined by the Board or
provided in the Restricted Stock Award agreement.

                     (v)      Transferability. Rights to acquire shares of Common Stock under the Restricted Stock Award
agreement shall not be transferable except by will or by the laws of descent and distribution and
shall be exercisable during the lifetime of the Participant only by the Participant.

          (b)       Stock Appreciation Rights. Each Stock Appreciation Right agreement shall be in such form
and shall contain such terms and conditions as the Board shall deem appropriate. The terms and
conditions of Stock Appreciation Right agreements may change from time to time, and the terms and
conditions of separate Stock Appreciation Right agreements need not be identical, but each Stock
Appreciation Right agreement shall include (through incorporation of the provisions hereof by
reference in the agreement or otherwise) the substance of each of the following provisions:

                     (i)      Calculation of Appreciation. Each Stock Appreciation Right will be denominated in shares
of Common Stock equivalents. The appreciation distribution payable on the exercise of a Stock
Appreciation Right will be not greater than an amount equal to the excess of (A) the aggregate Fair
Market Value (on the date of the exercise of the Stock Appreciation Right) of a number of shares of
Common Stock equal to the number of share of Common Stock equivalents in which the Participant is
vested under such Stock Appreciation Right and with respect to which the Participant is exercising
the Stock Appreciation Right on such date, over (B)

12

 

an amount that will be determined by the Committee at the time of grant of the Stock
Appreciation Right (subject to the provisions Section 5(b) regarding Ten Percent Stockholders).

                     (ii)     Vesting. At the time of the grant of a Stock Appreciation Right, the Board may impose
such restrictions or conditions to the vesting of such Right as it deems appropriate; provided,
however, that a Stock Appreciation Right that could be settled in shares of Common Stock shall be
subject to the provision of Section 10(h).

                     (iii)     Exercise. To exercise any outstanding Stock Appreciation Right, the Participant must
provide written notice of exercise to the Company in compliance with the provisions of the Stock
Appreciation Rights agreement evidencing such Right.

                     (iv)     Payment. The appreciation distribution in respect of a Stock Appreciation Right may be
paid in Common Stock, in cash, or any combination of the two, as the Board deems appropriate.

          (c)       Termination of Continuous Service. If a Participant’s Continuous Service terminates for
any reason, any unvested Stock Appreciation Rights shall be forfeited and any vested Stock
Appreciation Rights shall be automatically redeemed.

8.       Covenants of the Company.

          (a)       Availability of Shares. During the terms of the Stock Awards, the Company shall keep
available at all times the number of shares of Common Stock required to satisfy such Stock Awards.

          (b)       Securities Law Compliance. The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such authority as may be required to grant
Stock Awards and to issue and sell shares of Common Stock upon exercise of the Stock Awards;
provided, however, that this undertaking shall not require the Company to register under the
Securities Act the Plan, any Stock Award or any Common Stock issued or issuable pursuant to any
such Stock Award. If, after reasonable efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for the Company deems necessary for the
lawful issuance and sale of Common Stock under the Plan, the Company shall be relieved from any
liability for failure to issue and sell Common Stock upon exercise of such Stock Awards unless and
until such authority is obtained.

9.       Use of Proceeds From Stock.

          Proceeds from the sale of Common Stock pursuant to Stock Awards shall constitute general funds
of the Company.

10.      Miscellaneous.

          (a)       Acceleration of Exercisability and Vesting. The Board shall have the power to accelerate
the time at which a Stock Award may first be exercised or the time during which a Stock Award or
any part thereof will vest in accordance with the Plan, notwithstanding the

13

 

provisions in the Stock Award stating the time at which it may first be exercised or the time
during which it will vest.

          (b)       Stockholder Rights. No Participant shall be deemed to be the holder of, or to have any of
the rights of a holder with respect to, any shares of Common Stock subject to such Stock Award
unless and until such Participant has satisfied all requirements for exercise of the Stock Award
pursuant to its terms.

          (c)       No Employment or other Service Rights. Nothing in the Plan or any instrument executed or
Stock Award granted pursuant thereto shall confer upon any Participant any right to continue to
serve the Company or an Affiliate in the capacity in effect at the time the Stock Award was granted
or shall affect the right of the Company or an Affiliate to terminate (i) the employment of an
Employee with or without notice and with or without cause, (ii) the service of a Consultant
pursuant to the terms of such Consultant’s agreement with the Company or an Affiliate or (iii) the
service of a Director pursuant to the Bylaws of the Company or an Affiliate, and any applicable
provisions of the corporate law of the state in which the Company or the Affiliate is incorporated,
as the case may be.

          (d)       Incentive Stock Option $100,000 Limitation. To the extent that the aggregate Fair Market
Value (determined at the time of grant) of Common Stock with respect to which Incentive Stock
Options are exercisable for the first time by any Optionholder during any calendar year (under all
plans of the Company and its Affiliates) exceeds one hundred thousand dollars ($100,000), the
Options or portions thereof that exceed such limit (according to the order in which they were
granted) shall be treated as Nonstatutory Stock Options, notwithstanding any contrary provision of
a Stock Award Agreement.

          (e)       Investment Assurances. The Company may require a Participant, as a condition of exercising
or acquiring Common Stock under any Stock Award, (i) to give written assurances satisfactory to the
Company as to the Participant’s knowledge and experience in financial and business matters and/or
to employ a purchaser representative reasonably satisfactory to the Company who is knowledgeable
and experienced in financial and business matters and that he or she is capable of evaluating,
alone or together with the purchaser representative, the merits and risks of exercising the Stock
Award; and (ii) to give written assurances satisfactory to the Company stating that the Participant
is acquiring Common Stock subject to the Stock Award for the Participant’s own account and not with
any present intention of selling or otherwise distributing the Common Stock. The foregoing
requirements, and any assurances given pursuant to such requirements, shall be inoperative if (1)
the issuance of the shares of Common Stock upon the exercise or acquisition of Common Stock under
the Stock Award has been registered under a then currently effective registration statement under
the Securities Act or (2) as to any particular requirement, a determination is made by counsel for
the Company that such requirement need not be met in the circumstances under the then applicable
securities laws. The Company may, upon advice of counsel to the Company, place legends on stock
certificates issued under the Plan as such counsel deems necessary or appropriate in order to
comply with applicable securities laws, including, but not limited to, legends restricting the
transfer of the Common Stock.

14

 

          (f)       Withholding Obligations. To the extent provided by the terms of a Stock Award Agreement,
the Participant may satisfy any federal, state or local tax withholding obligation relating to the
exercise or acquisition of Common Stock under a Stock Award by any of the following means (in
addition to the Company’s right to withhold from any compensation paid to the Participant by the
Company) or by a combination of such means: (i) tendering a cash payment; (ii) authorizing the
Company to withhold shares of Common Stock from the shares of Common Stock otherwise issuable to
the Participant as a result of the exercise or acquisition of Common Stock under the Stock Award;
provided, however, that no shares of Common Stock are withheld with a value exceeding the minimum
amount of tax required to be withheld by law (or such lower amount as may be necessary to avoid
variable award accounting); or (iii) delivering to the Company owned and unencumbered shares of
Common Stock.

          (g)       Information Obligation. To the extent required by Section 260.140.46 of Title 10 of the
California Code of Regulations, the Company shall deliver financial statements to Participants at
least annually. This Section 10(g) shall not apply to key Employees whose duties in connection with
the Company assure them access to equivalent information.

          (h)       Repurchase Limitation. The terms of any repurchase option shall be specified in the Stock
Award, and the repurchase price may be either the Fair Market Value of the shares of Common Stock
on the date of termination of Continuous Service or the lower of (i) the Fair Market Value of the
shares of Common Stock on the date of repurchase or (ii) their original purchase price. To the
extent required by Section 260.140.41 and Section 260.140.42 of Title 10 of the California Code of
Regulations at the time a Stock Award is made, any repurchase option contained in a Stock Award
granted to a person who is not an Officer, Director or Consultant shall be upon the terms described
below:

                     (i)      Fair Market Value. If the repurchase option gives the Company the right to repurchase the
shares of Common Stock upon termination of Continuous Service at not less than the Fair Market
Value of the shares of Common Stock to be purchased on the date of termination of Continuous
Service, then (i) the right to repurchase shall be exercised for cash or cancellation of purchase
money indebtedness for the shares of Common Stock within ninety (90) days of termination of
Continuous Service (or in the case of shares of Common Stock issued upon exercise of Stock Awards
after such date of termination, within ninety (90) days after the date of the exercise) or such
longer period as may be agreed to by the Company and the Participant (for example, for purposes of
satisfying the requirements of Section 1202(c)(3) of the
Code regarding “qualified small business stock”) and (ii) the right terminates when the shares of
Common Stock become publicly traded.

                     (ii)     Original Purchase Price. If the repurchase option gives the Company the right to
repurchase the shares of Common Stock upon termination of Continuous Service at the lower of (i)
the Fair Market Value of the shares of Common Stock on the date of repurchase or
(ii) their original purchase price, then (x) the right to repurchase at the original purchase price
shall lapse at the rate of at least twenty percent (20%) of the shares of Common Stock per year
over five (5) years from the date the Stock Award is granted (without respect to the date the Stock
Award was exercised or became exercisable) and (y) the right to repurchase shall be exercised for
cash or cancellation of purchase money indebtedness for the shares of Common Stock within ninety
(90) days of termination of Continuous Service (or in the case of shares of

15

 

Common Stock issued upon exercise of Options after such date of termination, within. ninety (90)
days after the date of the exercise) or such longer period as may be agreed to by the Company and
the Participant (for example, for purposes of satisfying the requirements of Section 1202(c)(3) of
the Code regarding “qualified small business stock”).

11.      Adjustments Upon Changes in Stock.

          (a)       Capitalization Adjustments. If any change is made in, or other event occurs with respect
to, the Common Stock subject to the Plan or subject to any Stock Award without the receipt of
consideration by the Company (through merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash, stock split, liquidating
distribution, combination of shares, exchange of shares, change in corporate structure or other
transaction not involving the receipt of consideration by the Company (each a “Capitalization
Adjustment”), the Plan will be appropriately adjusted in the class(es) and maximum number of
securities subject to the Plan pursuant to Sections 4(a) and 4(b) and the outstanding Stock Awards
will be appropriately adjusted in the class(es) and number of securities and price per share of
Common Stock subject to such outstanding Stock Awards. The Board shall make such adjustments, and
its determination shall be final, binding and conclusive. (The conversion of any convertible
securities of the Company shall not be treated as a transaction “without receipt of consideration”
by the Company.)

          (b)       Dissolution or Liquidation. In the event of a dissolution or liquidation of the Company,
then all outstanding Options shall terminate immediately prior to the completion of such
dissolution or liquidation, and shares of Common Stock subject to the Company’s repurchase option
may be repurchased by the Company notwithstanding the fact that the holder of such stock is still
in Continuous Service.

          (c)       Corporate Transaction. In the event of a Corporate Transaction, any surviving corporation
or acquiring corporation may assume or continue any or all Stock Awards outstanding under the Plan
or may substitute similar stock awards for Stock Awards outstanding under the Plan (it being
understood that similar stock awards include, but are not limited to, awards to acquire the same
consideration paid to the stockholders or the Company, as the case may be, pursuant to the
Corporate Transaction), and any reacquisition or repurchase rights held by the Company in respect
of Common Stock issued pursuant to Stock Awards may be assigned by the Company to the successor of
the Company (or such successor’s parent company), if any, in connection with such Corporate
Transaction. In the event that any surviving corporation or acquiring corporation does not assume
or continue any or all such outstanding Stock Awards or substitute similar stock awards for such
outstanding Stock Awards, then with respect to Stock Awards that have not been assumed, continued
or substituted and that are held by Participants whose Continuous Service has not terminated prior
to the effective time of the Corporate Transaction, the vesting of such Stock Awards (and, if
applicable, the time at which such Stock Awards may be exercised) shall (contingent upon the
effectiveness of the Corporate Transaction) be accelerated in full to a date prior to the effective
time of such Corporate Transaction as the Board shall determine (or, if the Board shall not
determine such a date, to the date that is five (5) days prior to the effective time of the
Corporate Transaction), the Stock Awards shall terminate if not exercised (if applicable) at or
prior to such effective time, and any reacquisition or

16

 

repurchase rights held by the Company with respect to such Stock Awards held by Participants whose
Continuous Service has not terminated shall (contingent upon the effectiveness of the Corporate
Transaction) lapse. With respect to any other Stock Awards outstanding under the Plan that have not
been assumed, continued or substituted, the vesting of such Stock Awards (and, if applicable, the
time at which such Stock Award may be exercised) shall not be accelerated, unless otherwise
provided in a written agreement between the Company or any Affiliate and the holder of such Stock
Award, and such Stock Awards shall terminate if not exercised (if applicable) prior to the
effective time of the Corporate Transaction.

          (d)       Change in Control. A Stock Award held by any Participant whose Continuous Service has not
terminated prior to the effective time of a Change in Control may be subject to additional
acceleration of vesting and exercisability upon or after such event as may be provided in the Stock
Award Agreement for such Stock Award or as may be provided in any other written agreement between
the Company or any Affiliate and the Participant, but in the absence of such provision, no such
acceleration shall occur.

12.   Amendment of the Plan and Stock Awards.

          (a)       Amendment of Plan. The Board at any time, and from time to time, may amend the Plan.
However, except as provided in Section 11(a) relating to Capitalization Adjustments, no amendment
shall be effective unless approved by the stockholders of the Company to the extent stockholder
approval is necessary to satisfy the requirements of Section 422 of the Code.

          (b)       Stockholder Approval. The Board, in its sole discretion, may submit any other amendment to
the Plan for stockholder approval.

          (c)       Contemplated Amendments. It is expressly contemplated that the Board may amend the Plan in
any respect the Board deems necessary or advisable to provide eligible Employees with the maximum
benefits provided or to be provided under the provisions of the Code and the regulations
promulgated thereunder relating to Incentive Stock Options and/or to bring the Plan and/or
Incentive Stock Options granted under it into compliance therewith.

          (d)       No Impairment of Rights. Rights under any Stock Award granted before amendment of the
Plan shall not be impaired by any amendment of the Plan unless (i) the Company requests the consent
of the Participant and (ii) the Participant consents in writing.

          (e)       Amendment of Stock Awards. The Board at any time, and from time to time, may amend the
terms of anyone or more Stock Awards; provided, however, that the rights under any Stock Award
shall not be impaired by any such amendment unless (i) the Company requests the consent of the
Participant and (ii) the Participant consents in writing.

13.      Termination or Suspension of the Plan.

                    (a)       Plan Term. The Board may suspend or terminate the Plan at any time. Unless sooner
terminated, the Plan shall terminate on the day before the tenth (10th) anniversary of
the date the Plan is adopted by the Board or approved by the stockholders of the Company,

17

 

whichever is earlier. No Stock Awards may be granted under the Plan while the Plan is suspended or
after it is terminated.

                    (b)       No Impairment of Rights. Suspension or termination of the Plan shall not impair rights
and obligations under any Stock Award granted while the Plan is in effect except with the written
consent of the Participant.

14.     Effective Date of Plan.

          The Plan shall become effective as determined by the Board, but no Stock Award shall be
exercised unless and until the Plan has been approved by the stockholders of the Company, which
approval shall be within twelve (12) months before or after the date the Plan is adopted by the
Board.

15.     Choice of Law.

          The law of the State of California shall govern all questions concerning the construction,
validity and interpretation of this Plan, without regard to such state’s conflict of laws rules.

18

 

Anthera Pharmaceuticals, Inc.

2005 Equity Incentive Plan

Stock Option Grant Notice

Anthera Pharmaceuticals, Inc. (the “Company”), pursuant to its 2005 Equity Incentive Plan (the
“Plan”), hereby grants to Optionholder an option to purchase the number of shares of the Company’s
Common Stock set forth below. This option is subject to all of the terms and conditions as set
forth herein and in the Stock Option Agreement, the Plan and the Notice of Exercise, all of which
are attached hereto and incorporated herein in their entirety.

	 	 	 
	Optionholder:

	 	                                                            
	Date of Grant:

	 	                                                            
	Vesting Commencement Date:

	 	                                                            
	Number of Shares Subject to Option:

	 	                                                            
	Exercise Price (Per Share):

	 	                                                            
	Total Exercise Price:

	 	                                                            
	Expiration Date:

	 	                                                            

	 	 	 	 	 	 	 	 	 	 	 
	Type of Grant:

	 	o
	 	Incentive Stock Option
	 	o
	 	Nonstatutory Stock Option	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Exercise Schedule:

	 	o
	 	Same as Vesting Schedule
	 	o
	 	Early Exercise Permitted	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Vesting Schedule:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Payment:	 	By one or a combination of the following items (described in the Stock Option Agreement):
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 ̈	 	  By cash or check	 	 
	 	 	 ̈	 	  Pursuant to a Regulation T Program if the Shares are publicly traded	 	 
	 	 	 ̈	 	  By deferred payment	 	 

Additional Terms/Acknowledgements: The undersigned Optionholder acknowledges receipt of, and
understands and agrees to, this Stock Option Grant Notice, the Stock Option Agreement and the Plan.
Optionholder further acknowledges that as of the Date of Grant, this Stock Option Grant Notice,
the Stock Option Agreement and the Plan set forth the entire understanding between Optionholder and
the Company regarding the acquisition of stock in the Company and supersede all prior oral and
written agreements on that subject with the exception of (i) options previously granted and
delivered to Optionholder under the Plan, and (ii) the following agreements only:

	 	 	 	 	 
	
               Other Agreements:

	 	 
 

	 
	 	 	 	 
	 

	 	 

 

 

	 	 	 	 	 	 	 
	Anthera Pharmaceuticals, Inc.

	 	 	 	Optionholder:	 	 
	 
	By:
 

	 	 	 	 
 

	 	 
	Signature

	 	 	 	Signature	 	 
	 
	Title: 

	 	 	 	Date:	 	 
	 

	 	 	 	 

	 	 
	Date: 
 

	 	 	 	 	 	 

Attachments: Stock Option Agreement, 2005 Equity Incentive Plan and Notice of Exercise.

 

 

Attachment I

STOCK OPTION AGREEMENT

 

 

Anthera Pharmaceuticals, Inc.

2005 Equity Incentive Plan

Stock Option Agreement

(Incentive Stock Option or Nonstatutory Stock Option)

          Pursuant to your Stock Option Grant Notice (“Grant Notice”) and this Stock Option Agreement,
Anthera Pharmaceuticals, Inc. (the “Company”) has granted you an option under its 2005 Equity
Incentive Plan (the “Plan”) to purchase the number of shares of the Company’s Common Stock
indicated in your Grant Notice at the exercise price indicated in your Grant Notice. Defined terms
not explicitly defined in this Stock Option Agreement but defined in the Plan shall have the same
definitions as in the Plan.

          The details of your option are as follows:

          1.        Vesting. Subject to the limitations contained herein, your option will vest as
provided in your Grant Notice, provided that vesting will cease upon the termination of your
Continuous Service.

          2.        Number of Shares and Exercise Price. The number of shares of Common Stock subject
to your option and your exercise price per share referenced in your Grant Notice may be adjusted
from time to time for Capitalization Adjustments.

          3.        Exercise prior to Vesting (“Early Exercise”). If permitted in your Grant Notice
(i.e., the “Exercise Schedule” indicates that “Early Exercise” of your option is permitted) and
subject to the provisions of your option, you may elect at any time that is both (i) during the
period of your Continuous Service and (ii) during the term of your option, to exercise all or part
of your option, including the nonvested portion of your option; provided, however, that:

                     (a)        a partial exercise of your option shall be deemed to cover first vested shares of Common
Stock and then the earliest vesting installment of unvested shares of Common Stock;

                     (b)        any shares of Common Stock so purchased from installments that have not vested as of the
date of exercise shall be subject to the purchase option in favor of the Company as described in
the Company’s form of Early Exercise Stock Purchase Agreement;

                     (c)        you shall enter into the Company’s form of Early Exercise Stock Purchase Agreement with a
vesting schedule that will result in the same vesting as if no early exercise had occurred; and

                     (d)        if your option is an Incentive Stock Option, then, to the extent that the aggregate Fair
Market Value (determined at the time of grant) of the shares of Common Stock with respect to which
your option plus all other Incentive Stock Options you hold are exercisable for the first time by
you during any calendar year (under all plans of the Company and its Affiliates) exceeds one
hundred thousand dollars ($100,000), your option(s) or portions thereof

 

 

that exceed such limit (according to the order in which they were granted) shall be treated as
Nonstatutory Stock Options.

          4.        Method of Payment. Payment of the exercise price is due in full upon exercise of
all or any part of your option. You may elect to make payment of the exercise price in cash or by
check or in any other manner permitted by your Grant Notice, which may include one or more of the
following:

                     (a)        In the Company’s sole discretion at the time your option is exercised and provided that at
the time of exercise the Common Stock is publicly traded and quoted regularly in The Wall Street
Journal, pursuant to a program developed under Regulation T as promulgated by the Federal Reserve
Board that, prior to the issuance of Common Stock, results in either the receipt of cash (or check)
by the Company or the receipt of irrevocable instructions to pay the aggregate exercise price to
the Company from the sales proceeds.

                     (b)        Provided that at the time of exercise the Common Stock is publicly traded and quoted
regularly in The Wall Street Journal, by delivery of already-owned shares of Common Stock either
that you have held for the period required to avoid a charge to the Company’s reported earnings
(generally six (6) months) or that you did not acquire, directly or indirectly from the Company,
that are owned free and clear of any liens, claims, encumbrances or security interests, and that
are valued at Fair Market Value on the date of exercise. “Delivery” for these purposes, in the
sole discretion of the Company at the time you exercise your option, shall include delivery to the
Company of your attestation of ownership of such shares of Common Stock in a form approved by the
Company. Notwithstanding the foregoing, you may not exercise your option by tender to the Company
of Common Stock to the extent such tender would violate the provisions of any law, regulation or
agreement restricting the redemption of the Company’s stock.

                     (c)        Pursuant to the following deferred payment alternative:

                                 (i)        Not less than one hundred percent (100%) of the aggregate exercise price, plus accrued
interest, shall be due four (4) years from date of exercise or, at the Company’s election, upon
termination of your Continuous Service.

                                 (ii)       Interest shall be compounded at least annually and shall be charged at the minimum rate
of interest necessary to avoid (1) the treatment as interest, under any applicable provisions of
the Code, of any amounts other than amounts stated to be interest under the deferred payment
arrangement and (2) the treatment of the Option as a variable award for financial accounting
purposes.

                                 (iii)       At any time that the Company is incorporated in Delaware, payment of the Common Stock’s
“par value,” as defined in the Delaware General Corporation Law, shall be made in cash and not by
deferred payment.

                                 (iv)       In order to elect the deferred payment alternative, you must, as a part of your written
notice of exercise, give notice of the election of this payment alternative and, in order to secure
the payment of the deferred exercise price to the Company hereunder, if the Company so requests,
you must tender to the Company a promissory note and a pledge

 

 

agreement covering the purchased shares of Common Stock, both in form and substance
satisfactory to the Company, or such other or additional documentation as the Company may request.

          5.        Whole Shares. You may exercise your option only for whole shares of Common Stock.

          6.        Securities Law Compliance. Notwithstanding anything to the contrary contained
herein, you may not exercise your option unless the shares of Common Stock issuable upon such
exercise are then registered under the Securities Act or, if such shares of Common Stock are not
then so registered, the Company has determined that such exercise and issuance would be exempt from
the registration requirements of the Securities Act. The exercise of your option also must comply
with other applicable laws and regulations governing your option, and you may not exercise your
option if the Company determines that such exercise would not be in material compliance with such
laws and regulations.

          7.        Term. You may not exercise your option before the commencement or after the
expiration of its term. The term of your option commences on the Date of Grant and expires upon
the earliest of the following:

                     (a)        three (3) months after the termination of your Continuous Service for any reason other
than your Disability or death, provided that if during any part of such three (3) month period your
option is not exercisable solely because of the condition set forth in Section 6, your option shall
not expire until the earlier of the Expiration Date or until it shall have been exercisable for an
aggregate period of three (3) months after the termination of your Continuous Service;

                     (b)        twelve (12) months after the termination of your Continuous Service due to your
Disability;

                     (c)        eighteen (18) months after your death if you die either during your Continuous Service or
within three (3) months after your Continuous Service terminates;

                     (d)        the Expiration Date indicated in your Grant Notice; or

                     (e)        the day before the tenth (10th) anniversary of the Date of Grant.

          If your option is an Incentive Stock Option, note that to obtain the federal income tax
advantages associated with an Incentive Stock Option, the Code requires that at all times beginning
on the date of grant of your option and ending on the day three (3) months before the date of your
option’s exercise, you must be an employee of the Company or an Affiliate, except in the event of
your death or your permanent and total disability, as defined in Section 22(e) of the Code. (The
definition of disability in Section 22(e) of the Code is different from the definition of the
Disability under the Plan). The Company has provided for extended exercisability of your option
under certain circumstances for your benefit but cannot guarantee that your option will necessarily
be treated as an Incentive Stock Option if you continue to provide services to the Company or an
Affiliate as a Consultant or Director after your

 

 

employment terminates or if you otherwise exercise your option more than three (3) months
after the date your employment with the Company or an Affiliate terminates.

          8.        Exercise.

                     (a)        You may exercise the vested portion of your option (and the unvested portion of your
option if your Grant Notice so permits) during its term by delivering a Notice of Exercise (in a
form designated by the Company) together with the exercise price to the Secretary of the Company,
or to such other person as the Company may designate, during regular business hours, together with
such additional documents as the Company may then require.

                     (b)        By exercising your option you agree that, as a condition to any exercise of your option,
the Company may require you to enter into an arrangement providing for the payment by you to the
Company of any tax withholding obligation of the Company arising by reason of (1) the exercise of
your option, (2) the lapse of any substantial risk of forfeiture to which the shares of Common
Stock are subject at the time of exercise, or (3) the disposition of shares of Common Stock
acquired upon such exercise.

                     (c)        If your option is an Incentive Stock Option, by exercising your option you agree that you
will notify the Company in writing within fifteen (15) days after the date of any disposition of
any of the shares of the Common Stock issued upon exercise of your option that occurs within two
(2) years after the date of your option grant or within one (1) year after such shares of Common
Stock are transferred upon exercise of your option.

                     (d)        By exercising your option you agree that you shall not sell, dispose of, transfer, make
any short sale of, grant any option for the purchase of, or enter into any hedging or similar
transaction with the same economic effect as a sale, any shares of Common Stock or other securities
of the Company held by you, for a period of time specified by the managing underwriter(s) (not to
exceed one hundred eighty (180) days) following the effective date of a registration statement of
the Company filed under the Securities Act (the “Lock Up Period”); provided, however, that nothing
contained in this section shall prevent the exercise of a repurchase option, if any, in favor of
the Company during the Lock Up Period. You further agree to execute and deliver such other
agreements as may be reasonably requested by the Company and/or the underwriter(s) that are
consistent with the foregoing or that are necessary to give further effect thereto. In order to
enforce the foregoing covenant, the Company may impose stop-transfer instructions with respect to
your shares of Common Stock until the end of such period. The underwriters of the Company’s stock
are intended third party beneficiaries of this Section 8(d) and shall have the right, power and
authority to enforce the provisions hereof as though they were a party hereto.

          9.        Transferability. Your option is not transferable, except by will or by the laws
of descent and distribution, and is exercisable during your life only by you. Notwithstanding the
foregoing, by delivering written notice to the Company, in a form satisfactory to the Company, you
may designate a third party who, in the event of your death, shall thereafter be entitled to
exercise your option.

 

 

          10.       Right of First Refusal. Shares of Common Stock that you acquire upon exercise of
your option are subject to any right of first refusal that may be described in the Company’s bylaws
in effect at such time the Company elects to exercise its right; provided, however, that if your
option is an Incentive Stock Option and the right of first refusal described in the Company’s
bylaws in effect at the time the Company elects to exercise its right is more beneficial to you
than the right of first refusal described in the Company’s bylaws on the Date of Grant, then the
right of first refusal described in the Company’s bylaws on the Date of Grant shall apply. The
Company’s right of first refusal shall expire on the Listing Date. For purposes of this Agreement,
Listing Date shall mean the first date upon which any security of the Company is listed (or
approved for listing) upon notice of issuance on a national securities exchange or on the National
Market System of the Nasdaq Stock Market (or any successor to that entity).

          11.       Right of Repurchase. To the extent provided in the Company’s bylaws in effect at
such time the Company elects to exercise its right, the Company shall have the right to repurchase
all or any part of the shares of Common Stock you acquire pursuant to the exercise of your option.

          12.       Option not a Service Contract. Your option is not an employment or service
contract, and nothing in your option shall be deemed to create in any way whatsoever any obligation
on your part to continue in the employ of the Company or an Affiliate, or of the Company or an
Affiliate to continue your employment. In addition, nothing in your option shall obligate the
Company or an Affiliate, their respective stockholders, Boards of Directors, Officers or Employees
to continue any relationship that you might have as a Director or Consultant for the Company or an
Affiliate.

          13.       Withholding Obligations.

                       (a)        At the time you exercise your option, in whole or in part, or at any time thereafter as
requested by the Company, you hereby authorize withholding from payroll and any other amounts
payable to you, and otherwise agree to make adequate provision for (including by means of a
“cashless exercise” pursuant to a program developed under Regulation T as promulgated by the
Federal Reserve Board to the extent permitted by the Company), any sums required to satisfy the
federal, state, local and foreign tax withholding obligations of the Company or an Affiliate, if
any, which arise in connection with the exercise of your option.

                       (b)        Upon your request and subject to approval by the Company, in its sole discretion, and
compliance with any applicable legal conditions or restrictions, the Company may withhold from
fully vested shares of Common Stock otherwise issuable to you upon the exercise of your option a
number of whole shares of Common Stock having a Fair Market Value, determined by the Company as of
the date of exercise, not in excess of the minimum amount of tax required to be withheld by law (or
such lower amount as may be necessary to avoid variable award accounting). If the date of
determination of any tax withholding obligation is deferred to a date later than the date of
exercise of your option, share withholding pursuant to the preceding sentence shall not be
permitted unless you make a proper and timely election under Section 83(b) of the Code, covering
the aggregate number of shares of Common Stock acquired upon such exercise with respect to which
such determination is otherwise deferred, to accelerate the

 

 

determination of such tax withholding obligation to the date of exercise of your option.
Notwithstanding the filing of such election, shares of Common Stock shall be withheld solely from
fully vested shares of Common Stock determined as of the date of exercise of your option that are
otherwise issuable to you upon such exercise. Any adverse consequences to you arising in
connection with such share withholding procedure shall be your sole responsibility.

                      (c)        You may not exercise your option unless the tax withholding obligations of the Company
and/or any Affiliate are satisfied. Accordingly, you may not be able to exercise your option when
desired even though your option is vested, and the Company shall have no obligation to issue a
certificate for such shares of Common Stock or release such shares of Common Stock from any escrow
provided for herein unless such obligations are satisfied.

          14.       Notices. Any notices provided for in your option or the Plan shall be given in
writing and shall be deemed effectively given upon receipt or, in the case of notices delivered by
mail by the Company to you, five (5) days after deposit in the United States mail, postage prepaid,
addressed to you at the last address you provided to the Company.

          15.       Governing Plan Document. Your option is subject to all the provisions of the
Plan, the provisions of which are hereby made a part of your option, and is further subject to all
interpretations, amendments, rules and regulations, which may from time to time be promulgated and
adopted pursuant to the Plan. In the event of any conflict between the provisions of your option
and those of the Plan, the provisions of the Plan shall control.

 

 

Attachment II

2005 EQUITY INCENTIVE PLAN

 

 

Attachment III

NOTICE OF EXERCISE

 

 

Notice of Exercise

Anthera Pharmaceuticals, Inc.

[Address]

Date of Exercise:                                    

Ladies and Gentlemen:

          This constitutes notice under my stock option that I elect to purchase the number of shares
for the price set forth below.

	 	 	 	 	 	 	 	 	 
	Type of option (check one):	 	 	Incentive  ̈	 	 	Nonstatutory  ̈	 
	 
	 	 	 	 	 	 	 	 
	Stock option dated:
	 	 	                                     	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Number of shares as 

to which option is 

exercised:
	 	 	                                     	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Certificates to be 

issued in name of:
	 	 	                                     	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Total exercise price:
	 		$                                   	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Cash payment delivered 

herewith:
	 		$                                   	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Promissory note delivered 

herewith:
	 		$                                   	 	 	 	 	 

          By this exercise, I agree (i) to provide such additional documents as you may require pursuant
to the terms of the 2005 Equity Incentive Plan, (ii) to provide for the payment by me to you (in
the manner designated by you) of your withholding obligation, if any, relating to the exercise of
this option, and (iii) if this exercise relates to an incentive stock option, to notify you in
writing within fifteen (15) days after the date of any disposition of any of the shares of Common
Stock issued upon exercise of this option that occurs within two (2) years after the date of grant
of this option or within one (1) year after such shares of Common Stock are issued upon exercise of
this option.

          I hereby make the following certifications and representations with respect to the number of
shares of Common Stock of the Company listed above (the “Shares”), which are being acquired by me
for my own account upon exercise of the Option as set forth above:

          I acknowledge that the Shares have not been registered under the Securities Act of 1933, as
amended (the “Securities Act”), and are deemed to constitute “restricted securities” under Rule 701
and “control securities” under Rule 144 promulgated under the Securities Act.

 

 

          I warrant and represent to the Company that I have no present intention of distributing or
selling said Shares, except as permitted under the Securities Act and any applicable state
securities laws.

          I further acknowledge that I will not be able to resell the Shares for at least ninety days
(90) after the stock of the Company becomes publicly traded (i.e., subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934) under Rule 701 and that
more restrictive conditions apply to affiliates of the Company under Rule 144.

          I further acknowledge that all certificates representing any of the Shares subject to the
provisions of the Option shall have endorsed thereon appropriate legends reflecting the foregoing
limitations, as well as any legends reflecting restrictions pursuant to the Company’s Articles of
Incorporation, Bylaws and/or applicable securities laws.

          I further agree that, if required by the Company (or a representative of the underwriters) in
connection with the first underwritten registration of the offering of any securities of the
Company under the Securities Act, I will not sell or otherwise transfer or dispose of any shares of
Common Stock or other securities of the Company during such period (not to exceed one hundred
eighty (180) days) following the effective date of the registration statement of the Company filed
under the Securities Act as may be requested by the Company or the representative of the
underwriters. I further agree that the Company may impose stop-transfer instructions with respect
to securities subject to the foregoing restrictions until the end of such period.

	 	 	 	 	 
	 

	 	Very truly yours,	 	 
	 
	 	 	 	 
	 

	 	 

 

 

Anthera Pharmaceuticals, Inc.

Early Exercise Stock Purchase Agreement

under the 2005 Equity Incentive Plan

     This Agreement is made by and between Anthera Pharmaceuticals, Inc., a
Delaware corporation (the “Company”), and                      (“Purchaser”).

Witnesseth:

     Whereas, Purchaser holds a stock option dated                      to purchase shares of
common stock (“Common Stock”) of the Company (the “Option”) pursuant to the Company’s 2005 Equity
Incentive Plan (the “Plan”); and

     Whereas, the Option consists of a Stock Option Grant Notice and a Stock Option
Agreement; and

     Whereas, Purchaser desires to exercise the Option on the terms and conditions
contained herein; and

     Whereas, Purchaser wishes to take advantage of the early exercise provision of
Purchaser’s Option and therefore to enter into this Agreement;

     Now, therefore, it is agreed between the parties as follows:

     1.     Incorporation of Plan and Option by Reference. This Agreement is subject to all
of the terms and conditions as set forth in the Plan and the Option. If there is a conflict
between the terms of this Agreement and/or the Option and the terms of the Plan, the terms of the
Plan shall control. If there is a conflict between the terms of this Agreement and the terms of
the Option, the terms of the Option shall control. Defined terms not explicitly defined in this
Agreement but defined in the Plan shall have the same definitions as in the Plan. Defined terms
not explicitly defined in this Agreement or the Plan but defined in the Option shall have the same
definitions as in the Option.

     2.     Purchase and Sale of Common Stock.

             (a)     Agreement to purchase and sell Common Stock. Purchaser hereby agrees to purchase
from the Company, and the Company hereby agrees to sell to Purchaser, shares of the Common Stock of
the Company in accordance with the Notice of Exercise duly executed by Purchaser and attached
hereto as Exhibit A.

             (b)     Closing. The closing hereunder, including payment for and delivery of the Common
Stock, shall occur at the offices of the Company immediately following the execution of this
Agreement, or at such other time and place as the parties may mutually agree; provided, however,
that if stockholder approval of the Plan is required before the Option may be exercised, then the
Option may not be exercised, and the closing shall be delayed, until such stockholder

1.

 

approval is obtained. If such stockholder approval is not obtained within the time limit
specified in the Plan, then this Agreement shall be null and void.

     3.     Unvested Share Repurchase Option

             (a)     Repurchase Option. In the event Purchaser’s Continuous Service terminates, then the
Company shall have an irrevocable option (the “Repurchase Option”) for a period of ninety (90) days
after said termination (or in the case of shares issued upon exercise of the Option after such date
of termination, within ninety (90) days after the date of the exercise), or such longer period as
may be agreed to by the Company and Purchaser, to repurchase from Purchaser or Purchaser’s personal
representative, as the case may be, those shares that Purchaser received pursuant to the exercise
of the Option that have not as yet vested as of such termination date in accordance with the
Vesting Schedule indicated on Purchaser’s Stock Option Grant Notice (the “Unvested Shares”). For
convenience, the Vesting Schedule set forth in the Stock Option Grant Notice is set forth again in
the “Vesting Schedule” attached hereto as Exhibit D and incorporated herein by reference.

             (b)     Shares Repurchasable at Purchaser’s Original Exercise Price. The Company may
repurchase all or any of the Unvested Shares at the lower of (i) the Fair Market Value of the such
shares (as determined under the Plan) on the date of repurchase or (ii) the price equal to
Purchaser’s Exercise Price for such shares as indicated on Purchaser’s Stock Option Grant Notice.

     4.     Exercise of Repurchase Option. The Repurchase Option shall be exercised by
written notice signed by such person as designated by the Company, and delivered or mailed as
provided herein. Such notice shall identify the number of shares of Common Stock to be purchased
and shall notify Purchaser of the time, place and date for settlement of such purchase, which shall
be scheduled by the Company within the term of the Repurchase Option set forth above. The Company
shall be entitled to pay for any shares of Common Stock purchased pursuant to its Repurchase Option
at the Company’s option in cash or by offset against any indebtedness owing to the Company by
Purchaser (including without limitation any Promissory Note given in payment for the Common Stock),
or by a combination of both. Upon delivery of such notice and payment of the purchase price in any
of the ways described above, the Company shall become the legal and beneficial owner of the Common
Stock being repurchased and all rights and interest therein or related thereto, and the Company
shall have the right to transfer to its own name the Common Stock being repurchased by the Company,
without further action by Purchaser.

     5.     Capitalization Adjustments to Common Stock. In the event of a Capitalization
Adjustment, then any and all new, substituted or additional securities or other property to which
Purchaser is entitled by reason of Purchaser’s ownership of Common Stock shall be immediately
subject to the Repurchase Option and be included in the word “Common Stock” for all purposes of the
Repurchase Option with the same force and effect as the shares of the Common Stock presently
subject to the Repurchase Option, but only to the extent the Common Stock is, at the time, covered
by such Repurchase Option. While the total Option Price

2.

 

shall remain the same after each such event, the Option Price per share of Common Stock upon
exercise of the Repurchase Option shall be appropriately adjusted.

     6.     Corporate Transactions. In the event of a Corporate Transaction, then the
Repurchase Option may be assigned by the Company to the successor of the Company (or such
successor’s parent company), if any, in connection with such Corporate Transaction. To the extent
the Repurchase Option remains in effect following such Corporate Transaction, it shall apply to the
new capital stock or other property received in exchange for the Common Stock in consummation of
the Corporate Transaction, but only to the extent the Common Stock was at the time covered by such
right. Appropriate adjustments shall be made to the price per share payable upon exercise of the
Repurchase Option to reflect the Corporate Transaction upon the Company’s capital structure;
provided, however, that the aggregate price payable upon exercise of the Repurchase Option shall
remain the same.

     7.     Escrow of Unvested Common Stock. As security for Purchaser’s faithful performance
of the terms of this Agreement and to insure the availability for delivery of Purchaser’s Common
Stock upon exercise of the Repurchase Option herein provided for, Purchaser agrees, at the closing
hereunder, to deliver to and deposit with the Secretary of the Company or the Secretary’s designee
(“Escrow Agent”), as Escrow Agent in this transaction, three (3) stock assignments duly endorsed
(with date and number of shares blank) in the form attached hereto as Exhibit B, together with a
certificate or certificates evidencing all of the Common Stock subject to the Repurchase Option;
said documents are to be held by the Escrow Agent and delivered by said Escrow Agent pursuant to
the Joint Escrow Instructions of the Company and Purchaser set forth in Exhibit C, attached hereto
and incorporated by this reference, which instructions also shall be delivered to the Escrow Agent
at the closing hereunder.

     8.     Rights of Purchaser. Subject to the provisions of the Option, Purchaser shall
exercise all rights and privileges of a stockholder of the Company with respect to the shares
deposited in escrow. Purchaser shall be deemed to be the holder of the shares for purposes of
receiving any dividends that may be paid with respect to such shares and for purposes of exercising
any voting rights relating to such shares, even if some or all of such shares have not yet vested
and been released from the Company’s Repurchase Option.

     9.     Limitations on Transfer. In addition to any other limitation on transfer created
by applicable securities laws, Purchaser shall not sell, assign, hypothecate, donate, encumber or
otherwise dispose of any interest in the Common Stock while the Common Stock is subject to the
Repurchase Option. After any Common Stock has been released from the Repurchase Option, Purchaser
shall not sell, assign, hypothecate, donate, encumber or otherwise dispose of any interest in the
Common Stock except in compliance with the provisions herein and applicable securities laws.
Furthermore, the Common Stock shall be subject to any right of first refusal in favor of the
Company or its assignees that may be contained in the Company’s Bylaws.

3.

 

     10.    Restrictive Legends. All certificates representing the Common Stock shall have
endorsed thereon legends in substantially the following forms (in addition to any other legend
which may be required by other agreements between the parties hereto):

             (a)     “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO AN OPTION SET FORTH IN AN
AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR SUCH HOLDER’S PREDECESSOR IN INTEREST,
A COPY OF WHICH IS ON FILE AT THE PRINCIPAL OFFICE OF THIS COMPANY. ANY TRANSFER OR ATTEMPTED
TRANSFER OF ANY SHARES SUBJECT TO SUCH OPTION IS VOID WITHOUT THE PRIOR EXPRESS WRITTEN CONSENT OF
THE COMPANY.”

             (b)     “THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 AS AMENDED. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”

             (c)     “THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO A RIGHT OF FIRST REFUSAL OPTION
IN FAVOR OF THE COMPANY AND/OR ITS ASSIGNEE(S) AS PROVIDED IN THE BYLAWS OF THE COMPANY.”

             (d)     “THE SHARES REPRESENTED BY THIS CERTIFICATE WERE ISSUED PURSUANT TO THE EXERCISE OF [[AN
INCENTIVE STOCK OPTION] or [A NONSTATUTORY STOCK OPTION]].”

             (e)     Any legend required by appropriate blue sky officials.

     11.    Investment Representations. In connection with the purchase of the Common Stock,
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 Common Stock. Purchaser is acquiring the Common Stock for investment for
Purchaser’s 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 Common Stock has 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 further acknowledges and understands that the Common Stock must be held
indefinitely unless the Common Stock is subsequently registered under the Securities Act or an
exemption from such registration is available. Purchaser further

4.

 

acknowledges and understands that the Company is under no obligation to register the Common
Stock. Purchaser understands that the certificate evidencing the Common Stock will be imprinted
with a legend that prohibits the transfer of the Common Stock unless the Common Stock is registered
or such registration is not required in the opinion of counsel for the Company.

             (d)     Purchaser is familiar with the provisions of Rules 144 and 701, under the Securities Act,
as in effect from time to time, which, in substance, permit limited public resale of “restricted
securities” acquired, directly or indirectly, from the issuer thereof (or from an affiliate of such
issuer), in a non-public offering subject to the satisfaction of certain conditions. Rule 701
provides that if the issuer qualifies under Rule 701 at the time of issuance of the securities,
such issuance will be exempt from registration under the Securities Act. In the event the Company
becomes subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act
of 1934, the securities exempt under Rule 701 may be sold by Purchaser ninety (90) days thereafter,
subject to the satisfaction of certain of the conditions specified by Rule 144.

             (e)     In the event that the sale of the Common Stock does not qualify under Rule 701 at the time
of purchase, then the Common Stock may be resold by Purchaser in certain limited circumstances
subject to the provisions of Rule 144, which requires, among other things: (i) the availability of
certain public information about the Company and (ii) the resale occurring following the required
holding period under Rule 144 after Purchaser has purchased, and made full payment of (within the
meaning of Rule 144), the securities to be sold.

             (f)     Purchaser further understands that at the time Purchaser wishes to sell the Common Stock
there may be no public market upon which to make such a sale, and that, even if such a public
market then exists, the Company may not be satisfying the current public current information
requirements of Rule 144 or 701, and that, in such event, Purchaser would be precluded from selling
the Common Stock under Rule 144 or 701 even if the minimum holding period requirement had been
satisfied.

             (g)     Purchaser further warrants and represents that Purchaser has either (i) preexisting
personal or business relationships, with the Company or any of its officers, directors or
controlling persons, or (ii) the capacity to protect his own interests in connection with the
purchase of the Common Stock by virtue of the business or financial expertise of Purchaser or of
professional advisors to Purchaser who are unaffiliated with and who are not compensated by the
Company or any of its affiliates, directly or indirectly. Purchaser further warrants and
represents that Purchaser’s purchase the Common Stock was not accomplished by the publication of
any advertisement.

     12.    Market Stand-Off Agreement. By exercising the Option Purchaser agrees not to
sell, dispose of, transfer, make any short sale of, grant any option for the purchase of, or enter
into any hedging or similar transaction with the same economic effect as a sale, any shares of
Common Stock or other securities of the Company held by Purchaser, for a period of time specified
by the managing underwriter(s) following the effective date of a registration statement of the
Company filed under the Securities Act (the “Lock Up Period”); provided, however, that nothing
shall prevent the exercise of the Repurchase Option during the Lock Up Period. Purchaser further
agrees to execute and deliver such other agreements as may be reasonably

5.

 

requested by the Company and/or the underwriter(s) that are consistent with the foregoing or
that are necessary to give further effect thereto. In order to enforce the foregoing covenant, the
Company may impose stop-transfer instructions with respect to Purchaser’s shares of Common Stock
until the end of such period. The underwriters of the Company’s stock are intended third party
beneficiaries of this Section 12 and shall have the right, power and authority to enforce the
provisions hereof as though they were a party hereto.

     13.    Section 83(b) Election. Purchaser understands that Section 83(a) of
the Code taxes as ordinary income the difference between the amount paid for the Common Stock and
the fair market value of the Common Stock as of the date any restrictions on the Common Stock
lapse. In this context, “restriction” includes the right of the Company to buy back the Common
Stock pursuant to the Repurchase Option set forth above. Purchaser understands that Purchaser may
elect to be taxed at the time the Common Stock is 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 thirty (30) days of the date of purchase. Even if the fair
market value of the Common Stock at the time of the execution of this Agreement equals the amount
paid for the Common Stock, the 83(b) Election must be made to avoid income under Section 83(a) in
the future. Purchaser understands that failure to file such an 83(b) Election in a timely manner
may result in adverse tax consequences for Purchaser. Purchaser further understands that Purchaser
must file an additional copy of such 83(b) Election 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 Common Stock 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
assumes all responsibility for filing an 83(b) Election and paying all taxes resulting from such
election or the lapse of the restrictions on the Common Stock.

     14.    Refusal to Transfer. The Company shall not be required (a) to transfer on its
books any shares of Common Stock of the Company which shall have been transferred in violation of
any of the provisions set forth in this Agreement or (b) to treat as owner of such shares or to
accord the right to vote as such owner or to pay dividends to any transferee to whom such shares
shall have been so transferred.

     15.    No Employment Rights. This Agreement is not an employment contract and nothing
in this Agreement shall affect in any manner whatsoever the right or power of the Company or its
Affiliates to terminate Purchaser’s employment for any reason at any time, with or without cause
and with or without notice.

     16.    Miscellaneous.

             (a)     Notices. All notices required or permitted hereunder shall be in writing and shall be
deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by
confirmed facsimile if sent during normal business hours of the recipient, and if

6.

 

not during normal business hours of the recipient, then on the next business day, (c) five (5)
calendar days after having been sent by registered or certified mail, return receipt requested,
postage prepaid, or (d) one (1) business day after deposit with a nationally recognized overnight
courier, specifying next day delivery, with written verification of receipt. All communications
shall be sent to the other party hereto at such party’s address hereinafter set forth on the
signature page hereof, or at such other address as such party may designate by ten (10) days
advance written notice to the other party hereto.

             (b)     Successors and Assigns. This Agreement shall inure to the benefit of the successors and
assigns of the Company and, subject to the restrictions on transfer herein set forth, be binding
upon Purchaser, Purchaser’s successors, and assigns. The Company may assign the Repurchase Option
hereunder at any time or from time to time, in whole or in part.

             (c)     Attorneys’ Fees; Specific Performance. Purchaser shall reimburse the Company for all
costs incurred by the Company in enforcing the performance of, or protecting its rights under, any
part of this Agreement, including reasonable costs of investigation and attorneys’ fees. It is the
intention of the parties that the Company, upon exercise of the Repurchase Option and payment for
the shares repurchased, pursuant to the terms of this Agreement, shall be entitled to receive the
Common Stock, in specie, in order to have such Common Stock available for future issuance without
dilution of the holdings of other stockholders. Furthermore, it is expressly agreed between the
parties that money damages are inadequate to compensate the Company for the Common Stock and that
the Company shall, upon proper exercise of the Repurchase Option, be entitled to specific
enforcement of its rights to purchase and receive said Common Stock.

             (d)     Governing Law; Venue. This Agreement shall be governed by and construed in accordance
with the laws of the State of California. The parties agree that any action brought by either
party to interpret or enforce any provision of this Agreement shall be brought in, and each party
agrees to, and does hereby, submit to the jurisdiction and venue of, the appropriate state or
federal court for the district encompassing the Company’s principal place of business.

             (e)     Further Execution. The parties agree to take all such further action(s) as may reasonably
be necessary to carry out and consummate this Agreement as soon as practicable, and to take
whatever steps may be necessary to obtain any governmental approval in connection with or otherwise
qualify the issuance of the securities that are the subject of this Agreement.

             (f)     Independent Counsel. Purchaser acknowledges that this Agreement has been prepared on
behalf of the Company by                     , counsel to the Company and that                      does not represent,
and is not acting on behalf of, Purchaser. Purchaser has been provided with an opportunity to
consult with Purchaser’s own counsel with respect to this Agreement.

             (g)     Entire Agreement; Amendment. This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes and

7.

 

merges all prior agreements or understandings, whether written or oral. This Agreement may
not be amended, modified or revoked, in whole or in part, except by an agreement in writing signed
by each of the parties hereto.

             (h)     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.

             (i)     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.

     In witness whereof, the parties hereto have executed this Agreement as of
                    .

	 	 	 	 	 
	 
	 	Anthera Pharmaceuticals, Inc.
	 
	 	 
	 	 

	 

	 	By:
	 	 

	 

	 	 
	 	 
	 

	 	Name:
	 	 

	 

	 	 
	 	 
	 

	 	Title:
	 	 

	 

	 	 
	 	 
	 

	 	Address:

	 

	 	 
	 	 
	 

	 	 
	 	 

	 

	 	 
	 	 
	 

	 	 
	 	 

	 

	 	 
	 	 

	 
	 	 
	 
	 	Purchaser

	 
	 

	 	Address:

	 

	 	 
	 	 
	 

	 	 
	 	 

	 

	 	 
	 	 

	 	 	 
	Attachments:

	 	 

	 

	 	 

	Exhibit A

	 	Notice of Exercise

	Exhibit B

	 	Assignment Separate from Certificate

	Exhibit C

	 	Joint Escrow Instructions

	Exhibit D

	 	Vesting Schedule

8.

 

Exhibit A

NOTICE OF EXERCISE

A-1.

 

Exhibit B

STOCK ASSIGNMENT SEPARATE FROM CERTIFICATE

     For Value Received,                                          hereby sells, assigns and transfers unto
Anthera Pharmaceuticals, Inc., a Delaware corporation (the “Company”), pursuant to the Repurchase
Option under that certain Early Exercise Stock Purchase Agreement, dated                      by and
between the undersigned and the Company (the “Agreement”),                      (                    ) shares
of Common Stock of the Company standing in the undersigned’s name on the books of the Company
represented by Certificate No(s).                      and does hereby irrevocably constitute and
appoint the Company’s Secretary attorney to transfer said Common Stock on the books of the Company
with full power of substitution in the premises. This Assignment may be used only in accordance
with and subject to the terms and conditions of the Agreement, in connection with the repurchase of
shares of Common Stock issued to the undersigned pursuant to the Agreement, and only to the extent
that such shares remain subject to the Company’s Repurchase Option under the Agreement.

Dated:                     

	 	 	 
	 

	 	 
	 

	 	(Signature)

	 

	 	 

	 

	 	 

	 

	 	 
	 

	 	(Print Name)

(Instruction: Please do not fill in any blanks other than the “Signature” line and the
“Print Name” line.)

B-1.

 

Exhibit C

JOINT ESCROW INSTRUCTIONS

[name of escrow agent]

[title]

[address]

Dear Sir:

     As Escrow Agent for both Anthera Pharmaceuticals, Inc., a Delaware corporation
(“Company”), and the undersigned purchaser of Common Stock of the Company (“Purchaser”), you are
hereby authorized and directed to hold the documents delivered to you pursuant to the terms of that
certain Early Exercise Stock Purchase Agreement (“Agreement”), dated                      to which a
copy of these Joint Escrow Instructions is attached as Exhibit C, in accordance with the following
instructions:

     1.     In the event the Company or an assignee shall elect to exercise the Repurchase Option set
forth in the Agreement, the Company or its assignee will give to Purchaser and you a written notice
specifying the number of shares of Common Stock to be purchased, the purchase price, and the time
for a closing hereunder at the principal office of the Company. Purchaser and the Company hereby
irrevocably authorize and direct you to close the transaction contemplated by such notice in
accordance with the terms of said notice.

     2.     At the closing you are directed (a) to date any stock assignments necessary for the
transfer in question, (b) to fill in the number of shares being transferred, and (c) to deliver
same, together with the certificate evidencing the shares of Common Stock to be transferred, to the
Company against the simultaneous delivery to you of the purchase price (which may include suitable
acknowledgment of cancellation of indebtedness) of the number of shares of Common Stock being
purchased pursuant to the exercise of the Repurchase Option.

     3.     Purchaser irrevocably authorizes the Company to deposit with you any certificates
evidencing shares of Common Stock to be held by you hereunder and any additions and substitutions
to said shares as specified in the Agreement. Purchaser does hereby irrevocably constitute and
appoint you as the Purchaser’s attorney-in-fact and agent for the term of this escrow to execute
with respect to such securities and other property all documents of assignment and/or transfer and
all stock certificates necessary or appropriate to make all securities negotiable and complete any
transaction herein contemplated.

     4.     This escrow shall terminate upon expiration or exercise in full of the Repurchase Option,
whichever occurs first.

     5.     If at the time of termination of this escrow you should have in your possession any
documents, securities, or other property belonging to Purchaser, you shall deliver all of same to
Purchaser and shall be discharged of all further obligations hereunder; provided, however, that

C-1.

 

if at the time of termination of this escrow you are advised by the Company that the property
subject to this escrow is the subject of a pledge or other security agreement, you shall deliver
all such property to the pledgeholder or other person designated by the Company.

     6.     Except as otherwise provided in these Joint Escrow Instructions, your duties hereunder may
be altered, amended, modified or revoked only by a writing signed by all of the parties hereto.

     7.     You shall be obligated only for the performance of such duties as are specifically set
forth herein and may rely and shall be protected in relying or refraining from acting on any
instrument reasonably believed by you to be genuine and to have been signed or presented by the
proper party or parties or their assignees. You shall not be personally liable for any act you may
do or omit to do hereunder as Escrow Agent or as attorney-in-fact for Purchaser while acting in
good faith and any act done or omitted by you pursuant to the advice of your own attorneys shall be
conclusive evidence of such good faith.

     8.     You are hereby expressly authorized to disregard any and all warnings given by any of the
parties hereto or by any other person or corporation, excepting only orders or process of courts of
law, and are hereby expressly authorized to comply with and obey orders, judgments or decrees of
any court. In case you obey or comply with any such order, judgment or decree of any court, you
shall not be liable to any of the parties hereto or to any other person, firm or corporation by
reason of such compliance, notwithstanding any such order, judgment or decree being subsequently
reversed, modified, annulled, set aside, vacated or found to have been entered without
jurisdiction.

     9.     You shall not be liable in any respect on account of the identity, authority or rights of
the parties executing or delivering or purporting to execute or deliver the Agreement or any
documents or papers deposited or called for hereunder.

     10.     You shall not be liable for the outlawing of any rights under any statute of limitations
with respect to these Joint Escrow Instructions or any documents deposited with you.

     11.     Your responsibilities as Escrow Agent hereunder shall terminate if you shall cease to be
Secretary of the Company or if you shall resign by written notice to each party. In the event of
any such termination, the Company may appoint any officer or assistant officer of the Company as
successor Escrow Agent and Purchaser hereby confirms the appointment of such successor or
successors as the Purchaser’s attorney-in-fact and agent to the full extent of your appointment.

     12.     If you reasonably require other or further instruments in connection with these Joint
Escrow Instructions or obligations in respect hereto, the necessary parties hereto shall join in
furnishing such instruments.

     13.     It is understood and agreed that should any dispute arise with respect to the delivery
and/or ownership or right of possession of the securities, you are authorized and directed to
retain in your possession without liability to anyone all or any part of said securities

C-2.

 

until such dispute shall have been settled either by mutual written agreement of the parties
concerned or by a final order, decree or judgment of a court of competent jurisdiction after the
time for appeal has expired and no appeal has been perfected, but you shall be under no duty
whatsoever to institute or defend any such proceedings.

     14.     Any notice required or permitted hereunder shall be given in writing and shall be deemed
effectively given upon personal delivery, including delivery by express courier or five days after
deposit in the United States Post Office, by registered or certified mail with postage and fees
prepaid, addressed to each of the other parties hereunto entitled at the following addresses, or at
such other addresses as a party may designate by ten days’ advance written notice to each of the
other parties hereto:

	 	 	 	 	 	 	 
	 

	 	Company:
	 	 
	 	 

	 

	 	 
	 	 

	 	 

	 

	 	 
	 	 

	 	 

	 

	 	 
	 	 

	 	 

	 

	 	 
	 	 
	 	 

	 

	 	Purchaser:
	 	 
	 	 

	 

	 	 
	 	 

	 	 

	 

	 	 
	 	 

	 	 

	 

	 	 
	 	 

	 	 

	 

	 	 
	 	 
	 	 

	 

	 	Escrow Agent:
	 	 
	 	 

	 

	 	 
	 	 

	 	 

	 

	 	 
	 	 

	 	 

	 

	 	 
	 	 

	 	 

     15.     By signing these Joint Escrow Instructions you become a party hereto only for the purpose
of said Joint Escrow Instructions; you do not become a party to the Agreement.

     16.     You shall be entitled to employ such legal counsel and other experts (including without
limitation the firm of                                         ) as you may deem necessary properly to advise you in
connection with your obligations hereunder. You may rely upon the advice of such counsel, and may
pay such counsel reasonable compensation therefor. The Company shall be responsible for all fees
generated by such legal counsel in connection with your obligations hereunder.

     17.     This instrument shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and permitted assigns. It is understood and agreed that references to
“you” or “your” herein refer to the original Escrow Agent and to any and all successor Escrow
Agents. It is understood and agreed that the Company may at any time or from time to time assign
its rights under the Agreement and these Joint Escrow Instructions in whole or in part.

     18.     This Agreement shall be governed by and interpreted and determined in accordance with the
laws of the State of California, as such laws are applied by California courts to contracts made
and to be performed entirely in California by residents of that state.

C-3.

 

	 	 	 	 	 
	 
	 	Very truly yours,

 

 

Anthera Pharmaceuticals, Inc.
	 
	 	 
	 	 

	 
	 

	 	By:
	 	 

	 

	 	 
	 	 
	 

	 	Name:
	 	 

	 

	 	 
	 	 
	 

	 	Title:
	 	 

	 

	 	 
	 	 
	 

	 	 
	 	 

	 
	 
	 	Purchaser:
	 
	 	 
	 	 

	 
	 	 	 

	 	 	 
	Escrow Agent:

	 	 

	 

	 	 

	 

	 	 

	 

	 	 

C-4.

 

Exhibit D

VESTING SCHEDULE

D-1.

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