Document:

Exhibit
      10.2

     

    THE
      SECURITIES REPRESENTED BY THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE UNITED
      STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR UNDER THE
      PROVISIONS OF ANY APPLICABLE STATE SECURITIES LAWS, BUT HAVE BEEN ACQUIRED
      BY
      THE REGISTERED HOLDER HEREOF FOR PURPOSES OF INVESTMENT AND IN RELIANCE ON
      STATUTORY EXEMPTIONS UNDER THE 1933 ACT, AND UNDER ANY APPLICABLE STATE
      SECURITIES LAWS. THESE SECURITIES MAY NOT BE SOLD, PLEDGED, TRANSFERRED OR
      ASSIGNED EXCEPT IN A TRANSACTION WHICH IS EXEMPT UNDER THE PROVISIONS OF THE
      1933 ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO AN EFFECTIVE
      REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE
      COMMISSION.

     

    SECURED
      SENIOR PROMISSORY NOTE

    Seoul,
      Korea

    August
      24, 2007

    

    FOR
      VALUE
      RECEIVED, Eugene Science,
      Inc., a
Delaware
      corporation (“Borrower”),
      hereby promises to pay to the order of ______________,
      a ______________ (“Lender”),
      in
      lawful money of the United States at the address of Lender set forth herein,
      the
      principal amount of $_________, together with interest. This secured senior
      promissory note (this “Note”)
      has
      been executed by Borrower on the date set forth above (the “Effective
      Date”)
      pursuant to the Note and Warrant Purchase Agreement entered into as of the
      date
      hereof between Lender and Borrower (the “Purchase
      Agreement”).
      Capitalized terms used but not defined herein shall have the meanings assigned
      to such terms in the Purchase Agreement.

     

    1. Interest.
      This
      Note shall bear interest at a
      rate
      of 10%
      per
      annum (“Interest
      Rate”)
      from
      the Effective Date and continuing until payment in full of this Note. Interest
      shall compound monthly and shall be calculated on the basis of the actual number
      of days elapsed over a year of 360 days.

     

    2. Maturity
      Date.
      All or
      any portion of this Note, all accrued interest hereon and all other sums due
      hereunder, shall be due and payable on demand by Lender on February
      24,
      2008,
      subject to up-to-three
      extensions thereof as set forth in the Purchase Agreement (the “Maturity
      Date”).
      

     

    3. Application
      of Payments.
      

     

    3.1. Except
      as
      otherwise expressly provided herein, payments under this Note shall be applied
      (i) first to the repayment of any sums incurred by Lender for the payment of
      any
      expenses in enforcing the terms of this Note and/or the Purchase Agreement,
      (ii)
      then to the payment of accrued but unpaid interest due under this Note and
      (iii)
      then to the payment of outstanding principal due under this Note.

     

    3.2. Upon
      payment in full of this Note, applicable accrued and unpaid interest hereon,
      and
      any costs of collection hereunder, this Note shall be marked “Paid in Full” and
      returned to Borrower.

     

    4. Waiver
      of Notice.
      Borrower
      and each surety, guarantor, endorser, and other party ever liable for payment
      of
      any sums of money payable on this Note, jointly and severally, waive notice,
      presentment, demand for payment, protest, notice of protest and non-payment
      or
      dishonor, notice of acceleration, notice of intent to accelerate, notice of
      intent to demand, diligence in collecting, grace, and all other formalities
      of
      any kind, and hereby fully consent to all extensions without notice for any
      period or periods of time and partial payments, before or after maturity, and
      any impairment of any collateral securing this Note, all without prejudice
      to
      the Lender. The Lender shall similarly have the right to deal in any way, at
      any
      time, with one or more of the foregoing parties without notice to any other
      party, and to grant any such party any extensions of time for payment of any
      of
      said indebtedness, or to release or substitute part or all of the collateral
      securing this Note, or to grant any other indulgences or forbearances
      whatsoever, without notice to any other party and without in any way affecting
      the personal liability of any party hereunder.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    5. Optional
      Conversion.
      At any
      time prior to the Maturity Date, upon 5 days prior written notice to Borrower
      (“Conversion
      Date”),
      Lender shall have the right, in its sole discretion, to covert all outstanding
      principal and accrued interest under this Note existing as of close of business
      on the Conversion Date into shares of the Company’s Common Stock (“Common
      Stock”)
      at the
      conversion price set forth below. If Lender elects to convert this Note into
      shares of Common Stock, the number of shares of Common Stock to be issued upon
      such conversion shall be equal to the quotient obtained by dividing (a) the
      outstanding principal and accrued but unpaid interest due on this Note on the
      Conversion Date by (b) $0.65
      (the
“Purchase
      Price”).
      The
      Purchase Price shall be adjusted downward, but never upward, upon the occurrence
      of any of the events described in Sections 3.1 or 3.3 of the Warrant issued
      to
      Lender in connection with the issuance of this Note and otherwise adjusted
      upon
      the occurrence of any of the events described in Section 4 of the Warrant,
      as if
      such sections were dully set forth and incorporated herein by reference, with
      references to the “Warrant” to refer to this Note. The Company shall at all
      times reserve and keep available, solely for issuance and delivery on the
      conversion of this Note, all shares of Common Stock from time to time into
      which
      this Note could be convertible.

     

    6. Security
      Agreements.
      This
      Note
      is secured by and entitled to the benefits of a Security Agreement and Pledge
      Agreement in favor of Lender, together with such other collateral pledge
      agreements, mortgages, and other security documents, all of which instruments,
      as they may from time to time hereinafter be amended, and any and all
      instruments supplemental thereto reference is hereby made for a description
      of
      the collateral covered thereby (the “Security
      Agreements”).

     

    7. Transfer.
      This
      Note may be transferred by Lender at any time, provided that such transfer
      complies with applicable securities laws.

     

    8. Events
      of Default.
      The
      occurrence of any of following events (each an “Event
      of Default”)
      shall
      constitute an Event of Default of Borrower if not cured within ten (10) days
      of
      the occurrence thereof, with the exception of Section 8.1 which shall have
      no
      cure period:

     

    8.1. The
      failure to make when due any payment described in this Note or the Purchase
      Agreement, whether on or after the Maturity Date, by acceleration or otherwise;
      

     

    8.2. Other
      than as provided in Section 8.1, a breach of any representation, warranty,
      covenant or other provision of this Note or the Purchase Agreement, which,
      if
      capable of being cured, is not cured;

     

    8.3. Borrower
      shall fail to execute the Security Agreements and related financing statements
      for purposes of securing this Note within five (5) days of the date
      hereof;

     

    8.4. Borrower
      shall fail to obtain the subordination from other secured lenders of Borrower,
      if any, in such form as shall be required, in Lender’s sole discretion, to place
      Lender in the first priority position with respect to the inventory and
      receivables of Borrower;

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    8.5. Any
      representation, warranty, or statement made or deemed made by Borrower to Lender
      under the Purchase Agreement, or any other documents entered into by and between
      Borrower and Lender, or otherwise, shall be false, misleading, or erroneous
      in
      any material respect when made or deemed to have been made;

     

    8.6. Borrower
      shall default in the timely performance of any obligation, covenant or agreement
      made or owed by Borrower to Lender;

     

    8.7. Borrower
      shall commence a voluntary proceeding seeking liquidation, reorganization,
      or
      other relief with respect to itself or its debts under any bankruptcy,
      insolvency, or other similar law now or hereafter in effect, or seeking the
      appointment of a trustee, receiver, liquidator, custodian, or other similar
      official for it or a substantial part of its property or shall consent to any
      such relief or to the appointment of or taking possession by any such official
      in an involuntary case or other proceeding commenced against it or shall make
      a
      general assignment for the benefit of creditors or shall generally fail to
      pay
      its debts as they become due or shall take any corporate action to authorize
      any
      of the foregoing;

     

    8.8. Any
      involuntary proceeding shall be commenced against Borrower seeking liquidation,
      reorganization, or other relief with respect to it or its debts under any
      bankruptcy, insolvency, or other similar law now or hereafter in effect, or
      seeking the appointment of a trustee, receiver, liquidator, custodian, or other
      similar official for it or a substantial part of its property, and such
      involuntary proceeding shall remain undismissed and unstayed for a period of
      thirty (30) days;

     

    8.9. Borrower
      shall fail to discharge within a period of thirty (30) days after the
      commencement thereof any attachment, sequestration, or similar proceeding or
      proceedings involving an aggregate amount in excess of $100,000.00 against
      any
      of its assets or properties;

     

    8.10. Borrower
      shall fail to satisfy and discharge promptly any judgment or judgments against
      it for the payment of money in an aggregate amount in excess of
      $100,000.00;

     

    8.11. Borrower
      shall default in the payment of any of its indebtedness beyond any applicable
      grace period, or shall default in its performance of any agreement binding
      upon
      it or its property; 

     

    8.12. This
      Note
      shall cease to be in full force and effect or shall be declared null and void
      or
      the validity or enforceability hereof shall be contested or challenged by
      Borrower or any of its members or shareholders, or Borrower shall deny that
      it
      has any further liability or obligation under this Note; and 

     

    8.13. Borrower
      shall undertake to merge or consolidate with any other entity or otherwise
      reorganize or sell all or substantially all of the assets of the
      Company.

     

    Upon
      the
      occurrence of any Event of Default that is not cured within any applicable
      cure
      period, if any,
      the
      Lender may elect, by written notice delivered to Borrower, to take at any time
      any or all of the following actions: (i)
      declare this Note to be forthwith due and payable, whereupon the entire
      outstanding principal due under this Note, together with all accrued and unpaid
      interest thereon, and all other cash obligations hereunder including , without
      limitation, costs of collection incurred by Lender along with reasonable
      attorneys’ fees and costs,, shall become forthwith due and payable, without
      presentment, demand, protest or any other notice of any kind, all of which
      are
      hereby expressly waived by Borrower, anything contained herein to the contrary
      notwithstanding; and (ii) exercise any and all other remedies provided
      hereunder, in the Security Agreements executed in connection herewith, now
      or at
      any time in the future to secure the repayment of this Note, or available at
      law
      or in equity.
      In
      addition to the foregoing, Borrower may be required to issue warrants to Lender
      as set forth in Section 2.6 of the Purchase Agreement,
      which
      issuance would not preclude Lender from taking any and all actions whether
      at
      law or equity to enforce its rights.
      

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    9. Miscellaneous.

     

    9.1. Successors
      and Assigns.
      Subject
      to the exceptions specifically set forth in this Note, the terms and conditions
      of this Note shall inure to the benefit of and be binding upon the respective
      executors, administrators, heirs, successors and assigns of the
      parties.

     

    9.2. Loss
      or Mutilation of Note.
      Upon
      receipt by Borrower of evidence satisfactory to Borrower of the loss, theft,
      destruction or mutilation of this Note, together with indemnity reasonably
      satisfactory to Borrower, in the case of loss, theft or destruction, or the
      surrender and cancellation of this Note, in the case of mutilation, Borrower
      shall execute and deliver to Lender a new promissory note of like tenor and
      denomination as this Note.

     

    9.3. Notices.
      Any
      notice, demand, offer, request or other communication required or permitted
      to
      be given pursuant to the terms of this Note shall be in writing and shall be
      deemed effectively given the earlier of (i) when received, (ii) when delivered
      personally, (iii) one business day after being delivered by facsimile (with
      receipt of appropriate confirmation), (iv) one business day after being
      deposited with an overnight courier service, or (v) four days after being
      deposited in the U.S. mail, First Class with postage prepaid, and addressed
      to
      the recipient at the addresses set forth in the Purchase Agreement unless
      another address is provided to the other party in writing.

     

    9.4. Governing
      Law.
      This
      Note shall be governed in all respects by the laws of the State of Delaware
      as
      applied to agreements entered into and performed entirely within the State
      of
      Delaware by residents thereof, without regard to any provisions thereof relating
      to conflicts of laws among different jurisdictions. The parties hereto hereby
      agree that any suit or proceeding arising under this Agreement, or in connection
      with the consummation of the transactions contemplated hereby, shall be brought
      solely in a federal or state court located in the United States. 

     

    9.5. Waiver
      and Amendment.
      Any
      term of this Note may be amended, waived or modified only with the written
      consent of Borrower and Lender.

     

    9.6. Remedies;
      Costs of Collection; Attorneys’ Fees.
      No
      delay or omission by Lender in exercising any of its rights, remedies, powers
      or
      privileges hereunder or at law or in equity and no course of dealing between
      Lender and the undersigned or any other person shall be deemed a waiver by
      Lender of any such rights, remedies, powers or privileges, even if such delay
      or
      omission is continuous or repeated, nor shall any single or partial exercise
      of
      any right, remedy, power or privilege preclude any other or further exercise
      thereof by Lender or the exercise of any other right, remedy, power or privilege
      by Lender. The rights and remedies of Lender described herein shall be
      cumulative and not restrictive of any other rights or remedies available under
      any other instrument, at law or in equity. If an Event of Default occurs,
      Borrower agrees to pay, in addition to the Note and interest payable thereon,
      reasonable attorneys’ fees and any other costs reasonably incurred by Lender in
      connection with its pursuit of its remedies under this Note. 

     

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

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, Borrower has caused this Note to be signed on the Effective
      Date.

     

    
      	 	
              BORROWER:

            
	 	 
	 	
              EUGENE
                SCIENCE INC.

            
	 	 
	 	 
	 	
              

            
	
            	
              By:

            	
              Seung
                Kwon Noh

            
	 	 	
              President
                and Chief Executive OfficerTHIS
      WARRANT AND THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
      BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS WARRANT
      AND
      THE COMMON SHARES ISSUABLE UPON EXERCISE OF THIS WARRANT MAY NOT BE SOLD,
      OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
      REGISTRATION STATEMENT UNDER SAID ACT OR AN OPINION OF COUNSEL REASONABLY
      SATISFACTORY TO EUGENE SCIENCE INC THAT SUCH REGISTRATION IS NOT
      REQUIRED.

    

    
      	 	
              Right
                to purchase ______ shares
                of Common Stock of Eugene Science, Inc. (subject to adjustment as
                provided
                herein)

            

    

    

    COMMON
      STOCK PURCHASE WARRANT

     

    
      
        	No. 2007-__ 	
                Issue
                  Date: August 24, 2007 

              

      

    

     

    EUGENE
      SCIENCE, INC., a corporation organized under the laws of the State of Delaware
      (the “Company”), hereby certifies that, for value received, ___________________,
      a _______________, or its successors or assigns (the “Holder”), is entitled,
      subject to the terms set forth below, to purchase from the Company at any time
      after the Issue Date until 5:00 p.m., P.S.T. on the third anniversary of the
      Issue Date (the “Expiration Date”), up to ___________ (________) fully paid and
      nonassessable shares (“Warrant Shares”) of the common stock of the Company (the
“Common Stock”), at a per share purchase price of $0.25. The aforedescribed
      purchase price per share, as adjusted from time to time as herein provided,
      is
      referred to herein as the "Purchase Price." The number and character of such
      shares of Common Stock and the Purchase Price are subject to adjustment as
      provided herein. The Company may reduce but not increase the Purchase Price
      without the consent of the Holder. Capitalized terms not otherwise defined
      shall
      have the meaning set forth in the Note and Warrant Purchase Agreement by and
      between the Holder and the Company on or about this date.

     

    As
      used
      herein the following terms, unless the context otherwise requires, have the
      following respective meanings: 

     

    (a) The
      term
“Company” shall include Eugene Science, Inc., a Delaware corporation, and any
      corporation which shall succeed to or assume the obligations of Eugene Science,
      Inc. with the consent of the Holder hereunder. 

     

    (b) The
      term
“Common Stock” includes (a) the Company's Common Stock and (b) any other
      securities into which or for which any of the securities described in
      (a) may be converted or exchanged pursuant to a plan of recapitalization,
      reorganization, merger, sale of assets or otherwise.

     

    (c) The
      term
“Other Securities” refers to any stock (other than Common Stock) and other
      securities of the Company or any other person (corporate or otherwise) which
      the
      holder of this Warrant at any time shall be entitled to receive, or shall have
      received, on the exercise of this Warrant, in lieu of or in addition to Common
      Stock, or which at any time shall be issuable or shall have been issued in
      exchange for or in replacement of Common Stock or Other Securities pursuant
      to
      Section 4 or otherwise. 

     

    1. Exercise
      of Warrant.

     

    1.1. Number
      of Shares Issuable upon Exercise.
      From
      and after the Issue Date through and including the Expiration Date the Holder
      shall be entitled to receive, upon exercise of this Warrant in whole in
      accordance with the terms of subsection 1.2 or upon exercise of this
      Warrant in part in accordance with subsection 1.3, up to ________ shares of
      Common Stock of the Company, subject to adjustment pursuant to
      Section 4.

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    1.2. Full
      Exercise.
      This
      Warrant may be exercised in full by the Holder by delivery of an original or
      facsimile copy of the form of subscription attached as Exhibit
      A
      hereto
      (the “Subscription Form") duly executed by the Holder and surrender of the
      original Warrant within seven (7) days of exercise, to the Company at its
      principal office or at the office of its Warrant Agent (as provided
      hereinafter), accompanied by payment, in cash, wire transfer or by certified
      or
      official bank check payable to the order of the Company, in the amount obtained
      by multiplying the number of shares of Common Stock exercisable under this
      Warrant by the Purchase Price then in effect or by cashless exercise in the
      manner set forth in Section 2. This Warrant may also be exercised in full on
      a
      "cashless exercise" basis in accordance with the provisions of Section 2. In
      the
      event that the Company is dissolved, liquidated or wound up, this Warrant shall
      be automatically exercised without notice by Holder on a “cashless exercise”
basis unless the Holder elects otherwise.

     

    1.3. Partial
      Exercise.
      This
      Warrant may be exercised in part (but not for a fractional share) by surrender
      of this Warrant in the manner and at the place provided in subsection 1.2
      except that the amount payable by the Holder on such partial exercise shall
      be
      the amount obtained by multiplying (a) the number of whole shares of Common
      Stock designated by the Holder in the Subscription Form by (b) the Purchase
      Price then in effect. On any such partial exercise, the Company, at its expense,
      will forthwith issue and deliver to or upon the order of the Holder hereof
      a new
      Warrant of like tenor, in the name of the Holder hereof or as such Holder (upon
      payment by such Holder of any applicable transfer taxes) may request, the whole
      number of shares of Common Stock for which such Warrant may still be exercised.
      This Warrant may also be exercised in part on a "cashless exercise" basis in
      accordance with the provisions of Section 2.

     

    1.4. Fair
      Market Value.
      Fair
      Market Value of a share of Common Stock as of a particular date (the
      "Determination Date") shall mean: 

     

    (a) If
      the
      Company's Common Stock is traded on an exchange or is quoted on the National
      Association of Securities Dealers, Inc. Automated Quotation ("NASDAQ") Global
      Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or the
      American Stock Exchange, LLC (“AMEX”), then the closing or last sale price,
      respectively, reported for the last business day immediately preceding the
      Determination Date;

     

    (b) If
      the
      Company's Common Stock is not traded on an exchange or on the NASDAQ Global
      Select Market, the NASDAQ Global Market, the NASDAQ Capital Market or AMEX,
      but
      is traded in the over-the-counter market, then the average of the closing bid
      and ask prices reported for the last business day immediately preceding the
      Determination Date;

     

    (c) Except
      as
      provided in clause (d) below, if the Company's Common Stock is not publicly
      traded, then as the Holder and the Company agree, or in the absence of such
      an
      agreement, by “Appraisal,” as such term is defined below; or

     

    (d) If
      the
      Determination Date is the date of a liquidation, dissolution or winding up,
      or
      any event deemed to be a liquidation, dissolution or winding up pursuant to
      the
      Company's incorporation documents and the Delaware General Corporate Law
      (“DGCL”), then all amounts to be payable per share to holders of the Common
      Stock pursuant to the Company's incorporation documents and the DGCL in the
      event of such liquidation, dissolution or winding up, plus all other amounts
      to
      be payable per share in respect of the Common Stock in liquidation under the
      Company's incorporation documents and the DGCL, assuming for the purposes of
      this clause (d) that all of the shares of Common Stock then issuable upon
      exercise of all of the Warrants are outstanding at the Determination
      Date.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    As
      used
      herein, the term “Appraisal” shall mean the Fair Market Value of such stock
      determined by an appraiser mutually agreed upon by the Holder and the Company.
      If the parties cannot agree upon an appraiser within fifteen (15) days of the
      Determination Date, each party shall appoint an appraiser within five (5) days
      of the expiration of the 15-day period who shall agree upon a third appraiser
      who shall determine the Fair Market Value of such stock. If a party fails to
      appoint an appraiser, the appraiser appointed by the other party shall determine
      the Fair Market Value of such stock. The value determined pursuant to the
      foregoing shall be final, conclusive and binding upon the parties.

     

    1.5. Company
      Acknowledgment.
      The
      Company will, at the time of the exercise of this Warrant, upon the request
      of
      the Holder acknowledge in writing its continuing obligation to afford to the
      Holder any rights to which the Holder shall continue to be entitled after such
      exercise in accordance with the provisions of this Warrant. If the Holder shall
      fail to make any such request, such failure shall not affect the continuing
      obligation of the Company to afford to the Holder any such rights. 

     

    1.6 Delivery
      of Stock Certificates, etc. on Exercise.
      The
      Company agrees that the shares of Common Stock purchased upon exercise of this
      Warrant shall be deemed to be issued to the Holder as the record owner of such
      shares as of the close of business on the date on which this Warrant shall
      have
      been surrendered and payment made for such shares as aforesaid. As soon as
      practicable after the exercise of this Warrant in full or in part, and in any
      event within five (5) business days thereafter, the Company at its expense
      (including the payment by it of any applicable issue taxes) will cause to be
      issued in the name of and delivered to the Holder, or as the Holder (upon
      payment by the Holder of any applicable transfer taxes) may direct in compliance
      with applicable securities laws, a certificate or certificates for the number
      of
      duly and validly issued, fully paid and nonassessable shares of Common Stock
      (or
      Other Securities) to which the Holder shall be entitled on such exercise, plus,
      in lieu of any fractional share to which the Holder would otherwise be entitled,
      cash equal to such fraction multiplied by the then Fair Market Value of one
      full
      share of Common Stock, together with any other stock or other securities and
      property (including cash, where applicable) to which the Holder is entitled
      upon
      such exercise pursuant to Section 1 or otherwise. 

     

    2. Cashless
      Exercise.

     

    (a) If
      (i)
      the resale of the Warrant Shares has not been registered with the Securities
      and
      Exchange Commission within nine months of the Issue Date and (ii) the Fair
      Market Value of one share of Common Stock is greater than the Purchase Price
      (at
      the date of calculation as set forth below), in lieu of exercising this Warrant
      for cash, the Holder may elect, in its sole and complete discretion, to receive
      Warrant Shares equal to the value (as determined below) of this Warrant (or
      the
      portion thereof being cancelled) by surrender of this Warrant at the principal
      office of the Company together with the properly endorsed Subscription Form
      in
      which event the Company shall issue to the Holder a number of shares of Common
      Stock computed using the following formula:

     

    X=Y
      (A-B)

             
      A

    

    Where   
      X=        
      the
      number of shares of Common Stock to be issued to the holder

    

    
      	 	
              Y=

            	
              the
                number of shares of Common Stock purchasable under the Warrant or,
                if only
                a portion of the Warrant is being exercised, the portion of the Warrant
                being exercised (at the date of such
                calculation)

            

    

     

    
      	 	
              A=

            	
              the
                Fair Market Value of one share of the Company’s Common Stock (at the date
                of such calculation)

            

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    
      	 	
              B=

            	
              Purchase
                Price (as adjusted to the date of such
                calculation)

            

    

     

    The
      cashless exercise provisions set forth in this Section 2 shall expire
      immediately upon the effectiveness of the Company’s registration of the Warrant
      Shares.

     

    3. Adjustment
      for Reorganization, Consolidation, Merger, etc.; Adjustment for Issuance of
      Additional Securities

     

    3.1. Reorganization,
      Consolidation, Merger, etc.
      In case
      at any time or from time to time, the Company shall (a) effect a
      reorganization, (b) consolidate with or merge into any other person or
      (c) transfer all or substantially all of its properties or assets to any
      other person under any plan or arrangement contemplating the dissolution of
      the
      Company, then, in each such case, as a condition to the consummation of such
      a
      transaction, proper and adequate provision shall be made by the Company whereby
      the Holder, on the exercise hereof as provided in Sections 1 or 2, at any
      time after the consummation of such reorganization, consolidation or merger
      or
      the effective date of such dissolution, as the case may be, shall receive,
      in
      lieu of the Common Stock (or Other Securities) issuable on such exercise prior
      to such consummation or such effective date, the stock and other securities
      and
      property (including cash) to which the Holder would have been entitled upon
      such
      consummation or in connection with such dissolution, as the case may be, if
      the
      Holder had so exercised this Warrant, immediately prior thereto, all subject
      to
      further adjustment thereafter as provided in Section 4.

     

    3.2. Dissolution.
      In the
      event of any dissolution of the Company following the transfer of all or
      substantially all of its properties or assets, the Company, prior to such
      dissolution, shall at its expense deliver or cause to be delivered the stock
      and
      other securities and property (including cash, where applicable) receivable
      by
      the Holder after the effective date of such dissolution pursuant to this
      Section 3 to Holder or a bank or trust company (a "Trustee") having its
      principal office in Orange County, California, as trustee for the Holder.

     

    3.3. Continuation
      of Terms.
      Upon
      any reorganization, consolidation, merger or transfer (and any dissolution
      following any transfer) referred to in this Section 3, this Warrant shall
      continue in full force and effect and the terms hereof shall be applicable
      to
      the Other Securities and property receivable on the exercise of this Warrant
      after the consummation of such reorganization, consolidation or merger or the
      effective date of dissolution following any such transfer, as the case may
      be,
      and shall be binding upon the issuer of any Other Securities, including, in
      the
      case of any such transfer, the person acquiring all or substantially all of
      the
      properties or assets of the Company, whether or not such person shall have
      expressly assumed the terms of this Warrant as provided in Section 4. In
      the event this Warrant does not continue in full force and effect after the
      consummation of the transaction described in this Section 3, then only in
      such event will the Company's securities and property (including cash, where
      applicable) receivable by the Holder of the Warrants be delivered to the Holder
      or the Trustee as contemplated by Section 3.2.

     

    3.4 Subsequent
      Equity Sales.
      Other
      than Excluded Securities, if the Company or any Subsidiary thereof, as
      applicable, at any time while this Warrant is outstanding, shall offer, sell,
      grant any option to purchase or offer, sell or grant any right to reprice its
      securities, or otherwise dispose of or issue (or announce any offer, sale,
      grant
      or any option to purchase or other disposition) any Common Stock or warrants,
      options or convertible debt (“Common Stock Equivalents”) entitling any person to
      acquire shares of Common Stock, at an effective price per share less than the
      then Purchase
      Price
      (“Dilutive Issuance”), the Purchase
      Price
      shall be adjusted downward, but never upward, by multiplying the Purchase
      Price by
      a fraction, the numerator of which is the number of shares of Common Stock
      outstanding immediately prior to the Dilutive Issuance plus the number of shares
      of Common Stock which the offering price for such Dilutive Issuance would
      purchase at the then
      Purchase
      Price,
      and the denominator of which shall be the sum of the number of shares of Common
      Stock outstanding immediately prior to the Dilutive Issuance plus the number
      of
      shares of Common Stock so issued or issuable in connection with the Dilutive
      Issuance. Such adjustment shall be made whenever such Common Stock or Common
      Stock Equivalents are issued. The Company shall notify the Holder in writing,
      no
      later than the business day following the issuance of any Common Stock or Common
      Stock Equivalents subject to this section, indicating therein the applicable
      issuance price, or of applicable reset price, exchange price, conversion price
      and other pricing terms. In the event the Purchase Price is decreased due to
      a
      Dilutive Issuance, the number of shares of Common Stock issuable on exercise
      of
      this Warrant will be determined by multiplying the number of shares of Common
      Stock issuable on exercise of this Warrant immediately prior to the Dilutive
      Issuance by a fraction the numerator of which will be the Purchase Price
      immediately prior to the Dilutive Issuance and the denominator of which will
      be
      the Purchase Price adjusted by the Dilutive Issuance. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    “Excluded
      Securities” shall mean (i) securities issued in connection with the Note and the
      Warrant; (ii) securities issued upon conversion of any securities outstanding
      as
      of the date of this Warrant; (iii) securities issued pursuant to the acquisition
      of another business or business segment of any such entity by the Company by
      merger, purchase of substantially all the assets or other reorganization whereby
      the Company will own more than fifty percent (50%) of the voting power of such
      business entity or business segment of any such entity; (iv) securities issued
      to employees, consultants, officers, directors or advisors of the Company
      pursuant to any stock option, stock purchase or stock bonus plan, agreement
      or
      arrangement approved by the Board of Directors of the Company; (v) securities
      issued in connection with obtaining lease financing, whether issued to a
      non-affiliated lender, lessor, guarantor or other person and approved by the
      Board of Directors of the Company; (vi) securities issued to non-affiliated
      leasing companies, landlords and other providers of goods and services to the
      Company and approved by the Board of Directors; (vii) securities issued in
      connection with strategic transactions involving the Company and other
      non-affiliated entities, including (A) joint ventures, manufacturing, marketing
      or distribution arrangements or (B) technology license, transfer or development
      arrangements; provided that such strategic transactions and the issuance of
      shares therein, have been approved by the Board of Directors of the Company;
      and
      (viii) any right, option or warrant to acquire any security convertible into
      the
      securities pursuant to subsections (i) through (vii) above.

     

    4. Extraordinary
      Events Regarding Common Stock.
      In the
      event that the Company shall (a) issue additional shares of Common Stock as
      a
      dividend or other distribution on outstanding Common Stock, (b) subdivide its
      outstanding shares of Common Stock, or (c) combine its outstanding shares of
      the
      Common Stock into a smaller number of shares of Common Stock, then, in each
      such
      event, the Purchase Price shall, simultaneously with the happening of such
      event, be adjusted by multiplying the Purchase Price then in effect by a
      fraction, the numerator of which shall be the number of shares of Common Stock
      outstanding immediately prior to such event and the denominator of which shall
      be the number of shares of Common Stock outstanding immediately after such
      event, and the product so obtained shall thereafter be the Purchase Price then
      in effect. The Purchase Price, as so adjusted, shall be readjusted in the same
      manner upon the happening of any successive event or events described herein
      in
      this Section 4. The number of shares of Common Stock that the Holder shall
      thereafter, on the exercise hereof as provided in Section 1 or 2, be entitled
      to
      receive shall be adjusted to a number determined by multiplying the number
      of
      shares of Common Stock that would otherwise (but for the provisions of this
      Section 4) be issuable on such exercise by a fraction of which (a) the numerator
      is the Purchase Price in effect immediately prior to such event (but for the
      provisions of this Section 4), and (b) the denominator is the Purchase Price
      in
      effect on the date of such event. 

     

    5. Certificate
      as to Adjustments.
      In each
      case of any adjustment or readjustment in the Purchase Price, the Company at
      its
      expense will promptly cause its Chief Financial Officer or other appropriate
      designee to compute such adjustment or readjustment in accordance with the
      terms
      of this Warrant and prepare a certificate setting forth such adjustment or
      readjustment and showing in detail the facts upon which such adjustment or
      readjustment is based, including a statement of (a) the consideration
      received or receivable by the Company for any additional shares of Common Stock
      (or Other Securities) issued or sold or deemed to have been issued or sold,
      (b) the number of shares of Common Stock (or Other Securities) outstanding
      or deemed to be outstanding, and (c) the Purchase Price and the number of
      shares of Common Stock to be received upon exercise of this Warrant, in effect
      immediately prior to such adjustment or readjustment and as adjusted or
      readjusted as provided in this Warrant. The Company will forthwith mail a copy
      of each such certificate to the Holder of the Warrant and any Warrant Agent
      of
      the Company (appointed pursuant to Section 11 hereof).

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    6. Reservation
      of Stock, etc. Issuable on Exercise of Warrant; Financial
      Statements.
      The
      Company will at all times reserve and keep available, solely for issuance and
      delivery on the exercise of the Warrants, all shares of Common Stock (or Other
      Securities) from time to time issuable on the exercise of this Warrant. This
      Warrant entitles the Holder to receive copies of all financial and other
      information distributed or required to be distributed to the holders of the
      Company's Common Stock. 

     

    7. Assignment;
      Exchange of Warrant.
      Subject
      to compliance with applicable securities laws, this Warrant, and the rights
      evidenced hereby, may be transferred by any registered holder hereof (a
      "Transferor"). On the surrender for exchange of this Warrant, with the
      Transferor's endorsement in the form of Exhibit B attached hereto (the
“Transferor Endorsement Form") and together with an opinion of counsel
      reasonably satisfactory to the Company, if reasonably requested, that the
      transfer of this Warrant will be in compliance with applicable securities laws,
      the Company at its expense, but with payment by the Transferor of any applicable
      transfer taxes, will issue and deliver to or on the order of the Transferor
      thereof a new Warrant or Warrants of like tenor, in the name of the Transferor
      and/or the transferee(s) specified in such Transferor Endorsement Form (each,
      a
      "Transferee"), calling in the aggregate on the face or faces thereof for the
      number of shares of Common Stock called for on the face or faces of this Warrant
      so surrendered by the Transferor. No such transfers shall result in a public
      distribution of this Warrant.

     

    8. Replacement
      of Warrant.
      On
      receipt of evidence reasonably satisfactory to the Company of the loss, theft,
      destruction or mutilation of this Warrant and, in the case of any such loss,
      theft or destruction of this Warrant, on delivery of an indemnity agreement
      or
      security reasonably satisfactory in form and amount to the Company or, in the
      case of any such mutilation, on surrender and cancellation of this Warrant,
      the
      Company at its expense, twice only, will execute and deliver, in lieu thereof,
      a
      new Warrant of like tenor.

     

    9. Warrant
      Agent.
      The
      Company may, by written notice to the Holder, appoint an agent (a “Warrant
      Agent”) for the purpose of issuing Common Stock (or Other Securities) on the
      exercise of this Warrant pursuant to Sections 1 and/or 2, exchanging this
      Warrant pursuant to Section 7, and replacing this Warrant pursuant to
      Section 8, or any of the foregoing, and thereafter any such issuance,
      exchange or replacement, as the case may be, shall be made at such office by
      such Warrant Agent. 

     

    10. Transfer
      on the Company's Books.
      Until
      this Warrant is transferred on the books of the Company, the Company may treat
      the registered holder hereof as the absolute owner hereof for all purposes,
      notwithstanding any notice to the contrary. 

     

    11. Notices.
      All
      notices, demands, requests, consents, approvals, and other communications
      required or permitted hereunder shall be in writing and, unless otherwise
      specified herein, shall be (i) personally served, (ii) deposited in the mail,
      registered or certified, return receipt requested, postage prepaid, (iii)
      delivered by reputable air courier service with charges prepaid, or (iv)
      transmitted by hand delivery, telegram, or facsimile, addressed as set forth
      below or to such other address as such party shall have specified most recently
      by written notice. Any notice or other communication required or permitted
      to be
      given hereunder shall be deemed effective (a) upon hand delivery or delivery
      by
      facsimile, with accurate confirmation generated by the transmitting facsimile
      machine, at the address or number designated below (if delivered on a business
      day during normal business hours where such notice is to be received), or the
      first business day following such delivery (if delivered other than on a
      business day during normal business hours where such notice is to be received)
      or (b) on the second business day following the date of mailing by express
      courier service, fully prepaid, addressed to such address, or upon actual
      receipt of such mailing, whichever shall first occur. The addresses for such
      communications shall be the addresses set forth in the Purchase
      Agreement.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    12. Miscellaneous.
      This
      Warrant and any term hereof may be changed, waived, discharged or terminated
      only by an instrument in writing signed by the party against which enforcement
      of such change, waiver, discharge or termination is sought. This Warrant shall
      be construed and enforced in accordance with and governed by the laws of
      Delaware. Any dispute relating to this Warrant shall be adjudicated in the
      United States. The headings in this Warrant are for purposes of reference only,
      and shall not limit or otherwise affect any of the terms hereof. The invalidity
      or unenforceability of any provision hereof shall in no way affect the validity
      or enforceability of any other provision. 

     

     

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

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, the Company has executed this Warrant as of the date first
      written above. 

     

    
      	 	
              EUGENE
                SCIENCE, INC.

               

              By:                                                                                 

               

            
	
              Witness:

               

                                                                                               

               

            	 	 

    

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    Exhibit A

    

    FORM
      OF
      SUBSCRIPTION

    (to
      be
      signed only on exercise of Warrant)

    

    TO:
      EUGENE SCIENCE INC 

     

    The
      undersigned, pursuant to the provisions set forth in the attached Warrant
      (No.2007-5), hereby irrevocably elects to purchase (check applicable
      box):

    

    ___       
      ________
      shares of Common Stock covered by such Warrant; or

     

    ___       
      the
      maximum number of shares of Common Stock covered by such Warrant pursuant to
      the
      cashless exercise procedure set forth in Section 2.

    

    The
      undersigned herewith makes payment of the full purchase price for such shares
      at
      the price per share provided for in such Warrant, which is $___________. Such
      payment takes the form of (check applicable box or boxes):

    

    ___       
      $__________
      in lawful money of the United States; and/or

     

    ___       
      the
      cancellation of such portion of the attached Warrant as is exercisable for
      a
      total of _______ shares of Common Stock (using a Fair Market Value of $_______
      per share for purposes of this calculation); and/or

    

    ___       
      the
      cancellation of such number of shares of Common Stock as is necessary, in
      accordance with the formula set forth in Section 2, to exercise this
      Warrant with respect to the maximum number of shares of Common Stock purchasable
      pursuant to the cashless exercise procedure set forth in
      Section 2.

    

    The
      undersigned requests that the certificates for such shares be issued in the
      name
      of, and delivered to ________________________________ whose address is
      ________________________________ ________________________________.

    

    The
      undersigned represents and warrants that all offers and sales by the undersigned
      of the securities issuable upon exercise of the within Warrant shall be made
      pursuant to registration of the Common Stock under the Securities Act of 1933,
      as amended (the "Securities Act"), or pursuant to an exemption from registration
      under the Securities Act.

    

    
      	
              Dated:                                                                                 

            	
                                                                                                                

              (Signature
                must conform to name of holder as 

              specified
                on the face of the Warrant)

               

                                                                                                                

                                                                                                                

              (Address)

            

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    Exhibit B

     

    FORM
      OF
      TRANSFEROR ENDORSEMENT

    (To
      be
      signed only on transfer of Warrant)

     

    For
      value
      received, the undersigned hereby sells, assigns, and transfers unto the
      person(s) named below under the heading "Transferees" the right represented
      by
      the within Warrant to purchase the percentage and number of shares of Common
      Stock of EUGENE SCIENCE, INC. to which the within Warrant relates specified
      under the headings "Percentage Transferred" and "Number Transferred,"
      respectively, opposite the name(s) of such person(s) and appoints each such
      person Attorney to transfer its respective right on the books of EUGENE SCIENCE,
      INC. with full power of substitution in the premises.

     

    

    
      	
              Transferees

            	 	
              Percentage
                Transferred

            	 	
              Number
                Transferred

            
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

    

    

    

    
      	
              Dated:
                __________________, ______________

               

               

               

              Signed
                in the presence of:

               

                                                                                         

              (Name)

               

               

              ACCEPTED
                AND AGREED:

              [TRANSFEREE]

               

               

                                                                                         

              (Name)

            	
                                                                                                                           

              (Signature
                must conform to name of holder as specified 

              on
                the face of the warrant)

               

               

               

                                                                                                                           

                                                                                                                           

              (address)

               

                                                                                                                           

                                                                                                                           

              (address)

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