Document:

Exhibit
      10.39

    

    

    
      

      

    

     

    SECOND
      AMENDED AND RESTATED

    EMPLOYMENT
      AGREEMENT

    

    Between

    

    TRULITE,
      INC.

    

    and

    

    ERIC
      J.
      LADD

    

    

    dated
      as
      of March 28, 2006

    

    

    

    
      

      

    

     

    
      
        
        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
        

      

    

    AMENDED
      AND RESTATED

    EMPLOYMENT
      AGREEMENT

    

    

    This
      AMENDED AND RESTATED EMPLOYMENT
      AGREEMENT (this
      “Agreement”) is made effective as of the 26th
      day of
      March, 2006 by and between Trulite, Inc., a Delaware corporation (the
“Company”), and Eric J. Ladd (“Employee”).

     

    

     

    W
      I T
      N E S S E T H:

    

    

    WHEREAS,
      Employee entered into that certain Employment Agreement, dated as of July 28,
      2004, with the Company (the “Original Agreement”), and agreed to serve as an
      employee of the Company according to the terms of the Original Agreement;
      and

     

    WHEREAS,
      Employee entered into that certain Amended and Restated Employment Agreement
      dated February 4, 2005, with the Company (the “Second Agreement”);
      and

     

    WHEREAS,
      Employee and
      the
      Company now wish to further amend the Second Agreement to set forth the terms
      under which employee shall be employed on a full-time basis by the Company
      rather than one-half time, along with other amendments as set forth herein
      below, and to restate in their entirety the terms of employee’s employment by
      the Company.

     

    NOW,
      THEREFORE, in consideration of the continued employment of employee by the
      Company and the payment of salary and other compensation to employee by the
      Company, the parties hereto agree as follows:

    

    1.
      Employment.
      The
      Company hereby agrees to continue to employ employee, and employee hereby agrees
      to continue to serve the Company, on the terms and conditions set forth
      herein.

     

    2.
      Term.
      Employee shall continue to be employed by the Company as provided in Section
      1
      and such employment shall continue until January 31, 2007,
      unless sooner terminated as herein provided and Employment
      is terminable for any reason whatsoever by either the Company or employee upon
      thirty (30) days prior written notice to the other party, except that the
      Company may terminate this Agreement immediately for Cause, as defined herein
      below.

     

    3.
      Position
      and Duties.
      

     

    (a)
      The
      Company agrees to continue to employ employee in the capacity of Controls and
      Systems Engineer and employee agrees to continue to be so employed, in such
      capacity and having such duties and responsibilities which include, but not
      be
      limited, to the following: 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	·  	
              Kitty
                hawk III and IV controlled design, documentation and
                fabrication

            

    

     

    
      	·  	
              Kitty
                hawk III and IV Software design, documentation and
                programming.

            

    

     

    
      	·  	
              Electrical
                Engineering for the Kitty hawk III and IV product
                lines

            

    

     

    
      	·  	
              Electrical
                Engineering Training and
                documentation.

            

    

     

    as
      are
      assigned to employee from time to time by the Company’s Board of Directors or
      such officer of the Company that the Board of Directors designates as
      employee’s supervisor.

     

    (b)
      Employee agrees to devote all of his full business time and attention to the
      business and affairs of the Company and will use his best efforts in performing
      faithfully his duties under this Agreement. 

     

    (c)
      Employee shall use his reasonable best efforts to perform faithfully and
      efficiently his duties under this Agreement, and shall not engage in or be
      employed by any other business; provided, however, that nothing contained herein
      shall prohibit employee from (i) serving as a member of the board of directors,
      board of trustees or the like of any for-profit entity that does not compete
      with the Company, or performing services of any type for any civic or community
      entity, whether or not employee receives compensation therefore, (ii) investing
      his assets in such form or manner as shall not require any significant services
      on his part in the operation of the business of or property in which such
      investment is made as long as such business does not compete with the Company,
      or (iii) serving in various capacities with, and attending meetings of, industry
      or trade groups and associations, as long as employee’s engaging in any
      activities permitted by virtue of clauses (i), (ii) and (iii) above does not
      materially interfere with the ability of employee to perform the services and
      discharge the responsibilities required of him under this
      Agreement.

     

    4.
      Compensation
      and Related Matters.

     

    (a)
      Salary.
      During
      the term of this Agreement, the Company shall pay to employee an annual salary
      of $80,000 in substantially equal installments in accordance with the Company’s
      payroll policies.

     

    (b)
      Option.
      Subject
      to the approval of the Company’s Board of Directors or its Compensation
      Committee, you will be granted an option to purchase 174,826 shares of the
      Company’s common stock. The exercise price per share will be equal to the fair
      market value per share on the date the option is granted. The option will be
      subject to the terms and conditions applicable to options granted under the
      Company’s Stock Option Plan (the “Plan”), as described in the Plan and the
      applicable Stock Option Agreement in substantially the form attached hereto
      as
      Exhibit “A” (the “Option Agreement”). The option shall vest immediately and the
      purchased shares will be subject to repurchase by the Company at fair market
      value in the event that your service terminates for any reason. The Option
      Agreement shall contain such other terms as shall be determined by the Board
      of
      Directors of the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)
      Expenses.
      During
      the term of employee’s employment hereunder, employee shall be entitled to
      receive prompt reimbursement for all reasonable and necessary expenses incurred
      by employee in performing services hereunder, including all travel and living
      expenses while away from home on business or at the request of and in the
      service of the Company, cell phone expenses and entertainment expenses incurred
      by employee at the request of and in the service of the Company, provided that
      such expenses are incurred and accounted for in accordance with the policies
      and
      procedures established by the Company, as may be amended from time to
      time.

     

    (d)
      Benefits.
      Employee shall be entitled to participate in or receive benefits under any
      group
      health or other employee benefit plan or arrangement made available by the
      Company to its other similarly situated employees who perform the same or
      similar duties as employee
      in the same location, subject to and on a basis consistent with the terms,
      conditions and overall administration of such plans and
      arrangements.

     

    (e)
      Sick
      Leave.
      Employee shall be entitled to sick and emergency leave in accordance with the
      regular policies and procedures established by the Company. Any additional
      sick
      or emergency leave over and above paid leave provided by the Company, if any,
      shall be unpaid and shall be granted at the sole discretion of the Board of
      Directors of the Company.

     

    (f)
      Vacations.
      Employee shall be excused from rendering his services during reasonable vacation
      periods for 10 business days per year plus any additional vacation days that
      may
      be approved by the Chief Executive Officer of the Company or such other officer
      of the Company that the Company’s Board of Directors designates as employee’s
      supervisor. Employee shall also be entitled to all paid holidays given by the
      Company to its employees generally.

     

    5.
      Termination.
      Employee’s employment hereunder may be terminated under the following
      circumstances:

     

    (a)
      Termination
      of Employment for Cause.
      The
      Company may terminate the employment of the employee if the employee
      engages in any of the following conduct (termination for “Cause”):

     

    (1)
      Breaching any material provision of this Agreement;

     

    (2)
      Misappropriating funds or property of the Company;

     

    (3)
      Securing any personal profit not thoroughly disclosed to and approved by the
      Company in connection with any transaction entered into on behalf of the
      Company;

     

    (4)
      Engaging in conduct, even if not in connection with the performance of his
      duties hereunder, which might be reasonably expected to result in any effect
      materially adverse to the interests of the Company, such as fraud, dishonesty,
      conviction of a felony, or other acts of moral turpitude;

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (5)
      Failing to fulfill and perform the duties assigned to the employee in accordance
      with the terms hereof; or

     

    (6)
      Failing to comply with corporate policies of the Company that are promulgated
      from time to time by the Company’s Board of Directors. 

     

    (b)
      Termination
      in the Event of Death or Disability.

     

    (1)
      The
      Employer may terminate this Agreement in the event employee becomes and remains
      “Disabled” (as hereinafter defined), either physically, mentally, or otherwise,
      for a period of ninety (90) days during any consecutive period. As used herein,
      “Disabled” shall mean the continuous inability, whether mental or physical, of
      the employee to perform his normal job functions as determined by at least
      two
      (2) of three medical physicians. For purposes of such determination, the
      employee or his designee shall be entitled to appoint one physician, the Company
      shall be entitled to appoint one physician, and the two (2) physicians shall
      mutually appoint a third physician. Notwithstanding the foregoing, the employee
      or his designee and the Company may mutually agree that the employee is Disabled
      within the meaning of this Agreement.

     

    (2)
      This
      Agreement shall immediately terminate upon the death of employee.

     

    (c)
      Termination
      Without Cause.
      Either
      party may terminate the employment of employee without Cause at any time upon
      written notice to the other party.

     

    6.
      Effect
      of Termination of Employment.

     

    (a)
      Termination
      for Cause.
      In the
      event of termination for Cause, the employee shall be entitled to receive his
      compensation, as determined in Section 4 of this Agreement, due or accrued
      on a
      pro rata basis to the date of termination less the amount of actual damages,
      if
      any, caused to the Company by such breach of this Agreement.

     

    (b)
      Termination
      upon death or Disability.
      In the
      event of termination for death or Disability of the employee, the employee
      or
      his estate shall be entitled to receive his compensation, as determined in
      Section 4 of this Agreement, due or accrued on a pro rata basis to the effective
      date of termination.

     

    (c)
      Termination
      Without Cause.
      In the
      event the Company terminates employee’s employment without Cause, the Company
      shall continue making payments to employee in an amount equal to the
      compensation of the employee set forth in Section 4(a) of this Agreement, as
      if
      he were still employed for six (6) months, which shall constitute the full
      and
      total amount of liquidated damages that the employee shall be entitled to
      receive from the Company and its Affiliates and their officers, directors,
      and
      employees whether arising out of contract, tort or other claims arising out
      of
      his employment relationship with the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

       

    

    (d)
      Company’s
      Right to Repurchase Shares.
      In the
      event that employee’s employment is terminated by the Company for Cause or by
      employee’s voluntary departure, the Company shall have the right to repurchase
      all Common Stock owned by employee at fair market value, as defined below.
      In
      the event that employee’s employment is terminated by the Company without Cause,
      the employee shall be entitled to retain the stock he owns. The Company shall
      have the right to repurchase any unvested portion of the stock subject to the
      Option at fair market value, as defined below. “Fair market value,” for the
      purposes of this Section 6, shall be determined by a qualified business
      valuation or appraisal expert chosen jointly by the employee and the Company’s
      Board of Directors.

     

    7.
      Confidentiality,
      Non-Solicitation, and Non-Competition.
      

     

    (a)
      Confidential
      Information.
      Employee acknowledges that (i) upon execution of this Agreement and during
      the
      term of this Agreement and as a part of his employment with the Company and
      any
      subsidiaries, whether pursuant to this Agreement or otherwise, employee has
      been
      and will be afforded access to “Confidential Information” as hereinafter
      defined; (ii) public disclosure of such Confidential Information could have
      a
      material adverse impact on the Company and its business; and (iii) as a result
      of his access to such Confidential Information, employee will attain substantial
      technical expertise, skill and knowledge with respect to the Company’s business.
      Employee acknowledges that the provisions of this Section 7(a) are reasonable
      and necessary with respect to the improper use or disclosure of Confidential
      Information. As used in this Agreement, “Confidential Information” means any
      information, knowledge or data of any nature and in any form (including
      information that is electronically transmitted or stored on any form of magnetic
      or electronic storage media) relating to the past, current or prospective
      business or operations of the Company and its Affiliates, that at the time
      or
      times concerned is not generally known to persons engaged in businesses similar
      to those conducted or contemplated by the Company and its Affiliates (other
      than
      information known by such persons through a violation of an obligation of
      confidentiality to the Company), whether produced by the Company and its
      Affiliates or any of their consultants, agents or independent contractors or
      by
      employee, and whether or not marked confidential, including without limitation
      information relating to the Company’s or its Affiliates’ products and services,
      business plans, business acquisitions, processes, product or service research
      and development methods or techniques, inventions and improvements, training
      methods and other operational methods or techniques, quality assurance
      procedures or standards, operating procedures, files, plans, specifications,
      proposals, drawings, charts, graphs, support data, trade secrets, supplier
      lists, supplier information, purchasing methods or practices, distribution
      and
      selling activities, consultants’ reports, marketing and engineering or other
      technical studies, maintenance records, employment or personnel data, marketing
      data, strategies or techniques, financial reports, budgets, projections, cost
      analyses, price lists and analyses, employee lists, customer lists, customer
      source lists, proprietary computer software, and internal notes and memoranda
      relating to any of the foregoing.

     

    (b)
      Non-Disclosure
      of Confidential Information.
      In
      consideration of the foregoing and of continued employment by the Company and
      the compensation and benefits paid or provided and to be paid or provided to
      employee by the Company pursuant to this Agreement, employee hereby covenants
      and agrees that during the term of this Agreement and for a period of one (1)
      year thereafter, employee shall not, without the Company’s prior written consent
      or as may be required by law or legal process, disclose, communicate, divulge
      or
      make available to any person or entity (other than the Company), or use for
      any
      purpose other than for the exclusive benefit of the Company, any Confidential
      Information, whether employee has such information in his memory or embodied
      in
      writing or other physical form. Upon termination of employee’s employment
      hereunder, employee shall deliver promptly to the Company any Confidential
      Information in his possession, including any duplicates thereof and any notes
      or
      other records employee has prepared with respect thereto. In the event that
      the
      provisions of any applicable law or the order of any court would require
      employee to disclose or otherwise make available any Confidential Information
      then employee shall give the Company prompt prior written notice of such
      required disclosure and an opportunity to contest the requirement of such
      disclosure or apply for a protective order with respect to such Confidential
      Information by appropriate proceedings. Employee agrees that disclosures made
      by
      the Company or its affiliates to governmental authorities, to its customers
      or
      potential customers, to its suppliers or potential suppliers, to its employees
      or potential employees, to its consultants or potential consultants or
      disclosures made by the Company or its affiliates in any litigation or
      administrative or governmental proceedings shall not mean that the matters
      so
      disclosed are available to the general public. The foregoing, however, shall
      not
      limit the Company’s authority to determine whether or not any such information
      has been so disclosed.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (c)
      Protection
      of Information.
      

     

    (1)
      The
      Company shall disclose to employee, or place employee in a position to have
      access to or develop, trade secrets or confidential information of the Company;
      and/or shall entrust employee with business opportunities of the Company; and/or
      shall place employee in a position to develop business good will on behalf
      of
      the Company.

     

    (2)
      Employee agrees not to disclose or utilize, for employee’s
      personal benefit or for the direct or indirect benefit of any other person
      or
      entity, or for any other reason, whether for consideration or otherwise, during
      the term of his employment hereunder or at any time thereafter, any information,
      ideas, concepts, improvements, discoveries or inventions, whether patentable
      or
      not, which are conceived, made, developed, or acquired by employee, individually
      or in conjunction with others, during employee’s employment by the Company
      (whether during business hours or otherwise and whether on the Company’s
      premises or otherwise) which relate to the business, products, or services
      of
      the Company (including, without limitation, all such business ideas, prospects,
      proposals or other opportunities which are developed by employee during his
      employment hereunder, or originated by any third party and brought to the
      attention of employee during his employment hereunder, together with information
      relating thereto (including, without limitation, data, memoranda, opinions
      or
      other written, electronic or charted means, or any other trade secrets or other
      confidential or proprietary information of or concerning the Company))
      (collectively, “Business Information”). Moreover, all documents, drawings,
      notes, files, data, records, correspondence, manuals, models, specifications,
      computer programs, E-mail, voice mail, electronic databases, maps, and all
      other
      writings or materials of any type embodying any such Business Information are
      and shall be the sole and exclusive property of the Company. Upon termination
      of
      employee’s employment hereunder, for any reason, employee promptly shall deliver
      all Business Information, and all copies thereof, to the Company. As a result
      of
      knowledge of confidential Business Information of third parties, such as
      customers, suppliers, partners, joint ventures, and the like, of the Company,
      employee also agrees to preserve and protect the confidentiality of such third
      party Business Information to the same extent, and on the same basis, as the
      Company’s Business Information.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (3)
      Employee agrees that, during his employment, any inventions (whether or not
      patentable), concepts, ideas, expressions, discoveries, or improvements,
      including, without limitation, products, processes, methods, publications,
      works
      of authorship, software programs, designs, trade secrets, technical
      specifications, algorithms, technical data, know-how, internal reports and
      memoranda, marketing plans and any other patent or proprietary rights conceived,
      devised, developed, or reduced to practice, in whole or in part, by employee
      during the term of his employment by the Company that pertain to hydrogen fuel
      technology and fuel cell system technology (the “Developments”) are the sole and
      exclusive property of the Company on a worldwide basis as works made for hire
      or
      otherwise, and further that any revenue or other consideration obtained from
      the
      sale, license or other transfer or conveyance of any such Development, or a
      product or service incorporating such Development, is solely for the benefit
      of
      and becomes the property of the Company. To the extent a Development may not
      be
      considered work made by employee for hire for the Company, employee agrees
      to
      assign, and automatically assigns at the time of creation of the Development,
      without any requirement of further consideration, any and all right, title
      and
      interest he may have in such Development. Employee shall preserve each such
      Development as confidential and proprietary information of the Company. Employee
      shall promptly disclose each such Development and shall, upon demand, at the
      Company’s expense, execute and deliver to the Company such documents,
      instruments, deeds, acts and things as the Company may request to evidence
      or
      maintain the Company’s ownership of the Development, in any and all countries of
      the world, or to effect enforcement thereof, and to assign all rights, if any,
      of employee in and to each of such Developments. In addition, employee agrees
      not to publish or seek to publish any information whatsoever concerning any
      Development without the prior written consent of the Company, which may be
      withheld in its sole and absolute discretion.

     

    (4)
      Any
      inventions relating to the business of the Company that pertain to hydrogen
      fuel
      technology and fuel cell system technology conceived or reduced to practice
      after employee leaves the employ of the Company shall be conclusively deemed
      to
      have been conceived and/or reduced to practice during the period of the
      employment if conceived and/or reduced to practice within six months from
      termination of employment, and shall be subject to the terms of this Section
      7(c).

     

    (d)
      Non-Recruitment
      of Other Company Employees.
      During
      the term of  employee’s
      employment under this Agreement and for a period of one (1) year thereafter,
      employee will not directly or indirectly (i) recruit, solicit, encourage or
      induce any employee of the Company or any of its Affiliates to terminate such
      employment, (ii) otherwise disrupt any such employee’s relationship with the
      Company or its Affiliates, or (iii) whether individually or as owner, agent,
      employee, consultant or otherwise, hire, employ or offer employment to any
      person who is or was employed by the Company or an Affiliate thereof, whether
      or
      not such engagement is solicited by employee.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)
      Non-Solicitation
      of Customers or Other Persons.
      

     

    (1)
      During the term of employee’s employment under this Agreement and for a period
      of one (1) year thereafter, employee shall not solicit, induce, or attempt
      to
      induce any past, current or potential customer of the Company or its Affiliates
      to (A) cease doing business in whole or in part with or through the Company
      or
      its Affiliates or otherwise disrupt any previously established relationship
      existing between such customer and the Company or its Affiliates, or (B) do
      business with any other person or entity which performs services materially
      similar to or competitive with those provided by the Company or its Affiliates.
      

     

    (2)
      During the term of employee’s employment under this Agreement and for a period
      of one (1) year thereafter, employee shall not solicit, induce, or attempt
      to
      induce any supplier, lessor, licensor, or other person who has a business
      relationship with the Company or its Affiliates, or who on the date employee’s
      employment hereunder is terminated is engaged in discussions or negotiations
      to
      enter into a business relationship with the Company or its Affiliates, to
      discontinue or reduce the extent of such relationship with the Company or its
      Affiliates.

     

    (f)
      Non-Competition
      with the Company.
      Employee acknowledges and agrees that the services which have been and will
      be
      performed by employee for the Company or its Affiliates, whether during his
      employment with the Company or any Affiliates otherwise than pursuant to this
      Agreement, include services of a special, unique, unusual, extraordinary and
      intellectual character. Employee further acknowledges that the business of
      the
      Company and its subsidiaries is worldwide in scope, that employee has been
      and
      will be an integral part of conceiving, developing, marketing and selling such
      products and services on a worldwide basis, and that the Company and its
      subsidiaries compete with other organizations that are or could be located
      in
      any part of the world. Employee further acknowledges that, by virtue of the
      character of his services employee will be deemed to have worked for the Company
      or its subsidiaries at any and every location and geographic area in which
      employee’s services have been or will be applied on behalf of the Company or any
      subsidiary during his employment by the Company or any subsidiary whether
      pursuant to this Agreement or otherwise, irrespective of whether or not employee
      was physically present at such location or geographic area. Therefore, employee
      hereby covenants and agrees that during the term of employee’s employment
      hereunder and for a period of one (1) year thereafter, employee will not
      directly or indirectly engage or invest in, own, manage, operate, control or
      participate in the ownership, management, operation or control of, be employed
      by, associated or connected with, or render services or advice to, any other
      business whose services, products or activities compete in whole or in part
      with
      the services, products or activities of the Company relating to Company’s
      hydrogen fuel technology and fuel cell system technology or its subsidiaries,
      within all geographic areas worldwide in which employee’s services were applied
      by the Company or its subsidiaries at any time during employee’s by the Company
      or its subsidiaries otherwise than pursuant to this Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (g)
      Reasonableness
      of Covenants.
      It is
      understood and agreed by the parties hereto that the covenants by employee
      set
      forth in this Section 7 are essential elements of this Agreement and that but
      for employee’s agreement to comply with such covenants, the Company would not
      have entered into this Agreement. The parties also acknowledge that the time,
      scope, geographic area and other provisions of Section 7(b) through 7(f) have
      been specifically negotiated at arm’s length by sophisticated commercial parties
      with peculiar knowledge of the Company’s business. It is further agreed that all
      such provisions are reasonable under the circumstances pertaining to the
      Company’s business and employee’s key role therein, and necessary for the
      protection of the Company’s legitimate business interests. The Company and
      employee have independently consulted their respective legal counsel and have
      been advised in all respects concerning the reasonableness and propriety of
      such
      covenants, with specific regard to the nature of the businesses conducted by
      the
      Company and its subsidiaries.

     

    (h)
      Injunctive
      Relief and Other Remedies with Respect to Covenants.
      Employee acknowledges and agrees that the covenants and obligations of employee
      as set forth in this Section 7 relate to special, unique and extraordinary
      matters and that a violation of any of the terms of such covenants and
      obligations will cause the Company irreparable injury for which adequate
      remedies are not available at law. Employee further agrees that if, at any
      time,
      despite express agreement of the parties hereto, a court of competent
      jurisdiction holds that any portion of Section 7(b) through 7(f) of this
      Agreement is unenforceable for any reason, the maximum permissible restrictions
      of time, scope or geographic area as determined by such court, will be
      substituted for any such restrictions held unenforceable. In the event
 employee’s
      breach (or threatened breach in the case of clause (i) below) of any of the
      covenants and obligations set forth in this Section 7, employee agrees that
      the
      Company will (i) be entitled to an injunction, restraining order or such other
      equitable relief restraining employee from violating such covenants and
      obligations contained in this Section 7, without requiring the Company to post
      any bond or surety therefore, and (ii) have no further obligation to make any
      payments to employee hereunder. These remedies are cumulative and are in
      addition to any other rights and remedies the Company may have at law or in
      equity, including, but not limited to, recovery of costs and expenses such
      as
      reasonable attorneys’ fees by reason of any such breach, actual damages
      sustained by the Company as a result of any such breach, and cancellation of
      any
      unpaid salary, bonus, commissions or reimbursements otherwise outstanding at
      such time.

     

    (i)
      Applicability
      of Certain Sections.
      Notwithstanding the foregoing, the parties agree that Sections 7(d), 7(e) and
      7(f) shall be binding upon employee only in the event that employee voluntarily
      terminates his employment hereunder during the term of this Agreement without
      the consent of the Company and in the event that employee is discharged by
      the
      Company for Disability or Cause.

     

    8.
      Market
      Stand-Off. In connection with any public offering by the Company of its
      equity securities pursuant to an effective registration statement filed under
      the Securities Act of 1933, including the Company’s first public offering, the
      Employee shall not directly or indirectly sell, make any short sale of, loan,
      hypothecate, pledge, offer, grant or sell any option or other contract for
      the
      purchase of, purchase any option or other contract for the sale of, or otherwise
      dispose of or transfer, or agree to engage in any of the foregoing transactions
      with respect to, any equity securities of the Company without the prior written
      consent of the Company or its underwriters, if any. Such restriction (the
“Market Stand-Off”) shall be in effect for such period of time following the
      date of the final prospectus for the offering as may be requested by the Company
      or such underwriters, if any. In no event, however, shall such period exceed
      the
      shortest such period required of any stockholder holding five percent (5%)
      or
      more of the Company’s common stock on the date hereof. The Market Stand-Off
      shall in any event terminate two (2) years after the date of the Company’s first
      public offering following the date hereof. In the event of the declaration
      of a
      stock dividend, a spin-off, a stock split, an adjustment in conversion ratio,
      a
      recapitalization or a similar transaction affecting the Company’s outstanding
      securities without receipt of consideration, any new, substituted or additional
      securities which are by reason of such transaction distributed with respect
      to
      any equity securities of the Company subject to the Market Stand-Off, or into
      which such equity securities of the Company thereby become convertible, shall
      immediately be subject to the Market Stand-Off. In order to enforce the Market
      Stand-Off, the Company may impose stop-transfer instructions with respect to
      the
      equity securities of the Company until the end of the applicable stand-off
      period. The Company’s underwriters, if any, shall be beneficiaries of the
      agreement set forth in this Subsection (c). 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    9.
      Successors; Binding Agreement.
      The
      terms and conditions of this Agreement shall inure to the benefit of and be
      binding upon the parties hereto and their respective successors and permitted
      assigns. Neither this Agreement nor any rights, interests or obligations
      hereunder may be assigned by any party hereto without the prior written consent
      of the other parties hereto; provided that the Company may assign any rights,
      interests or obligations hereunder to any successor (whether direct or indirect,
      by merger, purchase, consolidation or otherwise) to all or substantially all
      of
      the business and/or assets of the Company.

     

    10.
      Notice.
      All
      notices hereunder must be in writing and shall be deemed to have given upon
      receipt of delivery by: (a) personal delivery to the designated individual,
      (b)
      certified or registered mail, postage prepaid, return receipt requested, (c)
      a
      nationally recognized overnight courier service with confirmation of receipt
      or
      (d) facsimile transmission with confirmation of receipt. All such notices must
      be addressed as follows or such other address as to which any party hereto
      may
      have notified the other in writing. For the purpose of this Agreement, notices,
      demands and all other communications provided for in this Agreement shall be
      in
      writing and shall be deemed to have been duly given when delivered or (unless
      otherwise specified) mailed by United States certified or registered mail,
      return receipt requested, postage prepared, addressed as follows:

     

    To
      the
      Company:

    

    3
      Riverway, Suite 1700

    Houston,
      Texas 77024

    Attention:
      John Sifonis

    

    To
      Employee:

    

    Eric
      J.
      Ladd

    4987
      West
      Woodbend Road

    West
      Jordan, Utah 84084

    

    or
      to
      such other address as any party may have furnished to the others in writing
      in
      accordance herewith, except that notices of change of address shall be effective
      only upon receipt.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    11.
      Miscellaneous.
      No
      provisions of this Agreement may be modified, waived or discharged unless such
      waiver, modification or discharge is agreed to in writing signed by employee
      and
      such officer of the Company as may be specifically designated by the Chief
      Executive Officer of the Company. No waiver by either party hereto at any time
      of any breach by the other party hereto of, or compliance with, any condition
      or
      provision of this Agreement to be performed by such other party shall be deemed
      a waiver of similar or dissimilar provisions or conditions at the same or at
      any
      prior or subsequent time. No agreements or representations, oral or otherwise
      express or implied, with respect to the subject matter hereof have been made
      by
      either party which are not set forth expressly in this Agreement.

     

    12.
      Validity.
      The
      invalidity or unenforceability of any provision or provisions of this Agreement
      shall not affect the validity or enforceability of any other provision of this
      Agreement, which shall remain in full force and effect.

     

    13.
      Counterparts.
      This
      Agreement may be executed in one or more counterparts, each of which shall
      be
      deemed to be an original but all of which together shall constitute one and
      the
      same instrument.

     

    14.
      Entire
      Agreement.
      This
      Agreement sets forth the entire agreement of the parties hereto in respect
      of
      the subject matter contained herein and supersedes all prior agreements,
      promises, covenants, arrangements, communications, representations or
      warranties, whether oral or written, by any officer, employee or representative
      of any party hereto; and any prior agreement of the parties hereto in respect
      of
      the subject matter contained herein is hereby terminated and
      canceled.

     

    15.
      Governing
      Law.
      This
      Agreement , the entire relationship of the parties hereto, and any litigation
      between the parties (whether grounded in contract, tort, statute, law or equity)
      shall be governed by, construed in accordance with, and interpreted pursuant
      to
      the laws of the State of Texas, without giving effect to its choice of laws
      principles. Exclusive venue for any litigation between the parties hereto shall
      be in Harris County, Texas, and shall be brought in the State District Courts
      of
      Harris County, Texas, or in the United States District Court for the Southern
      District of Texas, Houston Division. The parties hereto waive any challenge
      to
      personal jurisdiction or venue (including without limitation a challenge based
      on inconvenience) in Harris County, Texas, and specifically consent to the
      jurisdiction of the State District Courts of Harris County and the United States
      District Court for the Southern District of Texas, Houston
      Division.

     

    [signatures
      appear on the following page]

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    IN
      WITNESS WHEREOF, the parties have executed this Agreement on the date and year
      first above written.

    

    
      	 	 	 
	 	
              COMPANY:

               

              TRULITE, INC.

            
	 
 	 
 	 
 
	 	By:  	
	 	
              
Name:
              John Sifonis
	 	Title:
              President

    

     

    

    
      	 	 	 
	 	EMPLOYEE:
	 
 	 
 	 
 
	 	By:  	/s/ Eric
              J.
              Ladd
	 	
              
Eric
              J. Ladd

    

    

    

    
      
        
          

        

        
        

      

      
        
        

        
          

        

      

      
        
        

        
          

        

      

    

    EXHIBIT
      “A”

    

    FORM
      OF STOCK OPTION AGREEMENT

     

    Trulite,
      Inc. Stock Option Plan:

     

    Summary
      of Stock Purchase

     

     

    You
      have
      been granted the following option to purchase shares of the Common Stock of
      Trulite, Inc. (the “Company”):

     

    
      	 	Name of Optionee:	Eric J. Ladd
	 	 	 
	 	Total Number of Shares: 	174,826
	 	 	 
	 	Type of Option:	Nonstatutory Stock Option (NSO)
	 	 	 
	 	Exercise Price Per Share:	$0.88
	 	 	 
	 	Date of Grant: 	April 3, 2006
	 	 	 
	 	
              Date
                Exercisable:

            	This
              option may be exercised at any time after the Date of Grant for all
              or any
              part of the Shares subject to this option.
	 	 	 
	 	Vesting Commencement Date:	Immediately fully vested
	 	 	 
	 	
              Expiration
                Date:

            	
              April
                3, 2010

            

    

     

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

     

     

    
      	Purchaser: 	Trulite, Inc.
	 	 
	 	 
	 /s/ Eric J. Ladd	By: 
	 Eric J. Ladd	
              
                

              

              Title: President

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Trulite,
      Inc. Stock Option Plan:

     

    Stock
      Option Agreement

     

    
      	(1)  	
              Acquisition
                Of Shares.
                

            

    

     

    
      	(a)  	
              Transfer.
                On the terms and conditions set forth in the Summary of Stock Purchase
                and
                this Agreement, the Company agrees to transfer to the Purchaser the
                number
                of Shares set forth in the Summary of Stock Purchase. The transfer
                shall
                occur at the offices of the Company on the date of purchase set forth
                in
                the Summary of Stock Purchase or at such other place and time as
                the
                parties may agree.

            

    

     

    
      	(b)  	
              Consideration.
                The Purchaser agrees to pay the Purchase Price set forth in the Summary
                of
                Stock Purchase for each Purchased Share. The Purchase Price is agreed
                to
                be at least 100% of the Fair Market Value of the Purchased Shares.
                Payment
                shall be made in cash or cash equivalents on the date of purchase
                set
                forth in the Summary of Stock
                Purchase.

            

    

     

    
      	(c)  	
              Stock
                Option Plan and Defined Terms. The transfer of the Purchased Shares is
                subject to the Plan, a copy of which the Purchaser acknowledges having
                received. The provisions of the Plan are incorporated into this Agreement
                by this reference. Capitalized terms are defined in Section 12 of
                this
                Agreement.

            

    

     

    
      	(2)  	
              Right
                Of Repurchase.

            

    

     

    
      	(a)  	
              Scope
                of Repurchase Right. All Purchased Shares initially shall be
                Restricted Shares and shall be subject to a right (but not an obligation)
                of repurchase by the Company. The Purchaser shall not transfer, assign,
                encumber or otherwise dispose of any Restricted Shares, except as
                provided
                in the following sentence. 

            

    

     

    
      	(b)  	
              Condition
                Precedent to Exercise. The Right of Repurchase shall be exercisable
                only during the 60-day period next following the date when the Purchaser’s
                Service terminates for any reason, with or without cause, including
                (without limitation) death or
                disability.

            

    

     

    
      	(c)  	
              Lapse
                of Repurchase Right. The Right of Repurchase shall lapse with respect
                to the Purchased Shares in accordance with the vesting schedule set
                forth
                in the Summary of Stock Purchase. In addition, the Right of Repurchase
                shall lapse and all of the remaining Restricted Shares shall become
                vested
                if (i) the Company is subject to a Change in Control before the
                Purchaser’s Service terminates and (ii) the Right of Repurchase is not
                assigned to the entity that employs the Purchaser immediately after
                the
                Change in Control or to its parent or
                subsidiary.

            

    

     

    
      	(d)  	
              Repurchase
                Cost. If the Company exercises the Right of Repurchase, it shall
                pay
                the Purchaser an amount equal to the Purchase Price for each of the
                Restricted Shares being
                repurchased.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(e)  	
              Exercise
                of Repurchase Right. The Right of Repurchase shall be exercisable only
                by written notice delivered to the Purchaser prior to the expiration
                of
                the 60-day period specified in Subsection (b) above. The notice shall
                set forth the date on which the repurchase is to be effected. Such
                date
                shall not be more than 30 days after the date of the notice. The
                certificate(s) representing the Restricted Shares to be repurchased
                shall,
                prior to the close of business on the date specified for the repurchase,
                be delivered to the Company properly endorsed for transfer. The Company
                shall, concurrently with the receipt of such certificate(s), pay
                to the
                Purchaser the purchase price determined according to Subsection (d)
                above. Payment shall be made in cash or cash equivalents or by canceling
                indebtedness to the Company incurred by the Purchaser in the purchase
                of
                the Restricted Shares. The Right of Repurchase shall terminate with
                respect to any Restricted Shares for which it has not been timely
                exercised pursuant to this
                Subsection (e).

            

    

     

    
      	(f)  	
              Additional
                Shares or Substituted Securities. In the event of the declaration of a
                stock dividend, the declaration of an extraordinary dividend payable
                in a
                form other than stock, a spin-off, a stock split, an adjustment in
                conversion ratio, a recapitalization or a similar transaction affecting
                the Company’s outstanding securities without receipt of consideration, any
                new, substituted or additional securities or other property (including
                money paid other than as an ordinary cash dividend) which are by
                reason of
                such transaction distributed with respect to any Restricted Shares
                or into
                which such Restricted Shares thereby become convertible shall immediately
                be subject to the Right of Repurchase. Appropriate adjustments to
                reflect
                the distribution of such securities or property shall be made to
                the
                number and/or class of the Restricted Shares. Appropriate adjustments
                shall also, after each such transaction, be made to the price per
                share to
                be paid upon the exercise of the Right of Repurchase in order to
                reflect
                any change in the Company’s outstanding securities effected without
                receipt of consideration therefor; provided, however, that the aggregate
                purchase price payable for the Restricted Shares shall remain the
                same.

            

    

     

    
      	(g)  	
              Termination
                of Rights as Stockholder. If the Company makes available, at the time
                and place and in the amount and form provided in this Agreement,
                the
                consideration for the Restricted Shares to be repurchased in accordance
                with this Section 2, then after such time the person from whom such
                Restricted Shares are to be repurchased shall no longer have any
                rights as
                a holder of such Restricted Shares (other than the right to receive
                payment of such consideration in accordance with this Agreement).
                Such
                Restricted Shares shall be deemed to have been repurchased in accordance
                with the applicable provisions hereof, whether or not the certificate(s)
                therefor have been delivered as required by this Agreement.
                

            

    

     

    
      	(h)  	
              Escrow.
                Upon issuance, the certificates for Restricted Shares shall be deposited
                in escrow with the Company to be held in accordance with the provisions
                of
                this Agreement. Any new, substituted or additional securities or
                other
                property described in Subsection (f) above shall immediately be
                delivered to the Company to be held in escrow, but only to the extent
                the
                Purchased Shares are at the time Restricted Shares. All regular cash
                dividends on Restricted Shares (or other securities at the time held
                in
                escrow) shall be paid directly to the Purchaser and shall not be
                held in
                escrow. Restricted Shares, together with any other assets or securities
                held in escrow hereunder, shall be (i) surrendered to the Company for
                repurchase and cancellation upon the Company’s exercise of its Right of
                Repurchase or Right of First Refusal or (ii) released to the
                Purchaser upon the Purchaser’s request to the extent the Purchased Shares
                are no longer Restricted Shares (but not more frequently than once
                every
                six months). In any event, all Purchased Shares which have vested
                (and any
                other vested assets and securities attributable thereto) shall be
                released
                within 60 days after the earlier of (i) the Purchaser's cessation of
                Service or (ii) the lapse of the Right of First
                Refusal.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(3)  	
              Right
                Of First Refusal. 

            

    

     

    
      	(a)  	
              Right
                of First Refusal. In the event that the Purchaser proposes to sell,
                pledge or otherwise transfer to a third party any Purchased Shares,
                or any
                interest in such Purchased Shares, the Company shall have the Right
                of
                First Refusal with respect to all (and not less than all) of such
                Purchased Shares. If the Purchaser desires to transfer Purchased
                Shares,
                the Purchaser shall give a written Transfer Notice to the Company
                describing fully the proposed transfer, including the number of Purchased
                Shares proposed to be transferred, the proposed transfer price, the
                name
                and address of the proposed Transferee and proof satisfactory to
                the
                Company that the proposed sale or transfer will not violate any applicable
                federal or state securities laws. The Transfer Notice shall be signed
                both
                by the Purchaser and by the proposed Transferee and must constitute
                a
                binding commitment of both parties to the transfer of the Purchased
                Shares. The Company shall have the right to purchase all, and not
                less
                than all, of the Purchased Shares on the terms of the proposal described
                in the Transfer Notice (subject, however, to any change in such terms
                permitted under Subsection (b) below) by delivery of a notice of
                exercise of the Right of First Refusal within 30 days after the date
                when the Transfer Notice was received by the Company. The Company’s rights
                under this Subsection (a) shall be freely assignable, in whole or in
                part.

            

    

     

    
      	(b)  	
              Transfer
                of Shares. If the Company fails to exercise its Right of First Refusal
                within 30 days after the date when it received the Transfer Notice,
                the Purchaser may, not later than 90 days following receipt of the
                Transfer Notice by the Company, conclude a transfer of the Purchased
                Shares subject to the Transfer Notice on the terms and conditions
                described in the Transfer Notice, provided that any such sale is
                made in
                compliance with applicable federal and state securities laws and
                not in
                violation of any other contractual restrictions to which the Purchaser
                is
                bound. Any proposed transfer on terms and conditions different from
                those
                described in the Transfer Notice, as well as any subsequent proposed
                transfer by the Purchaser, shall again be subject to the Right of
                First
                Refusal and shall require compliance with the procedure described
                in
                Subsection (a) above. If the Company exercises its Right of First
                Refusal, the parties shall consummate the sale of the Purchased Shares
                on
                the terms set forth in the Transfer Notice within 60 days after the
                date
                when the Company received the Transfer Notice (or within such longer
                period as may have been specified in the Transfer Notice); provided,
                however, that in the event the Transfer Notice provided that payment
                for
                the Purchased Shares was to be made in a form other than cash or
                cash
                equivalents paid at the time of transfer, the Company shall have
                the
                option of paying for the Purchased Shares with cash or cash equivalents
                equal to the present value of the consideration described in the
                Transfer
                Notice.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(c)  	
              Additional
                Shares or Substituted Securities. In the event of the declaration of a
                stock dividend, the declaration of an extraordinary dividend payable
                in a
                form other than stock, a spin-off, a stock split, an adjustment in
                conversion ratio, a recapitalization or a similar transaction affecting
                the Company’s outstanding securities without receipt of consideration, any
                new, substituted or additional securities or other property (including
                money paid other than as an ordinary cash dividend) which are by
                reason of
                such transaction distributed with respect to any Purchased Shares
                subject
                to this Section 3 or into which such Purchased Shares thereby become
                convertible shall immediately be subject to this Section 3.
                Appropriate adjustments to reflect the distribution of such securities
                or
                property shall be made to the number and/or class of Purchased Shares
                subject to this Section 3.

            

    

     

    
      	(d)  	
              Termination
                of Right of First Refusal. Any other provision of this Section 3
                notwithstanding, in the event that the Stock is readily tradable
                on an
                established securities market when the Purchaser desires to transfer
                Purchased Shares, the Company shall have no Right of First Refusal,
                and
                the Purchaser shall have no obligation to comply with the procedures
                prescribed by Subsections (a) and (b)
                above.

            

    

     

    
      	(e)  	
              Permitted
                Transfers. This Section 3 shall not apply to (i) a transfer by
                beneficiary designation, will or intestate succession or (ii) a transfer
                to the Purchaser’s spouse, children or grandchildren or to a trust
                established by the Purchaser for the benefit of the Purchaser or
                the
                Purchaser’s spouse, children or grandchildren, provided in either case
                that the Transferee agrees in writing on a form prescribed by the
                Company
                to be bound by all provisions of this Agreement. If the Purchaser
                transfers any Purchased Shares, either under this Subsection (e) or
                after the Company has failed to exercise the Right of First Refusal,
                then
                this Section 3 shall apply to the Transferee to the same extent as to
                the Purchaser.

            

    

     

    
      	(f)  	
              Termination
                of Rights as Stockholder. If the Company makes available, at the time
                and place and in the amount and form provided in this Agreement,
                the
                consideration for the Purchased Shares to be purchased in accordance
                with
                this Section 3, then after such time the person from whom such
                Purchased Shares are to be purchased shall no longer have any rights
                as a
                holder of such Purchased Shares (other than the right to receive
                payment
                of such consideration in accordance with this Agreement). Such Purchased
                Shares shall be deemed to have been purchased in accordance with
                the
                applicable provisions hereof, whether or not the certificate(s) therefor
                have been delivered as required by this
                Agreement.

            

    

     

    
      	(4)  	
              Other
                Restrictions On Transfer. 

            

    

     

    
      	(a)  	
              Purchaser
                Representations. In connection with the issuance and acquisition of
                Shares under this Agreement, the Purchaser hereby represents and
                warrants
                to the Company as follows:

            

    

     

    
      	(i)  	
              The
                Purchaser is acquiring and will hold the Purchased Shares for investment
                for his or her account only and not with a view to, or for resale
                in
                connection with, any “distribution” thereof within the meaning of the
                Securities Act.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(ii)  	
              The
                Purchaser understands that the Purchased Shares have not been registered
                under the Securities Act by reason of a specific exemption therefrom
                and
                that the Purchased Shares must be held indefinitely, unless they
                are
                subsequently registered under the Securities Act or the Purchaser
                obtains
                an opinion of counsel, in form and substance satisfactory to the
                Company
                and its counsel, that such registration is not required. The Purchaser
                further acknowledges and understands that the Company is under no
                obligation to register the Purchased
                Shares.

            

    

     

    
      	(iii)  	
              The
                Purchaser is aware of the adoption of Rule 144 by the Securities and
                Exchange Commission under the Securities Act, which permits limited
                public
                resales of securities acquired in a non-public offering, subject
                to the
                satisfaction of certain conditions, including (without limitation)
                the
                availability of certain current public information about the issuer,
                the
                resale occurring only after the holding period required by Rule 144
                has
                been satisfied, the sale occurring through an unsolicited “broker’s
                transaction,” and the amount of securities being sold during any
                three-month period not exceeding specified limitations. The Purchaser
                acknowledges and understands that the conditions for resale set forth
                in
                Rule 144 have not been satisfied and that the Company has no plans to
                satisfy these conditions in the foreseeable
                future.

            

    

     

    
      	(iv)  	
              The
                Purchaser will not sell, transfer or otherwise dispose of the Purchased
                Shares in violation of the Securities Act, the Securities Exchange
                Act of
                1934, or the rules promulgated thereunder, including Rule 144 under
                the Securities Act. The Purchaser agrees that he or she will not
                dispose
                of the Purchased Shares unless and until he or she has complied with
                all
                requirements of this Agreement applicable to the disposition of Purchased
                Shares and he or she has provided the Company with written assurances,
                in
                substance and form satisfactory to the Company, that (A) the proposed
                disposition does not require registration of the Purchased Shares
                under
                the Securities Act or all appropriate action necessary for compliance
                with
                the registration requirements of the Securities Act or with any exemption
                from registration available under the Securities Act (including Rule
                144)
                has been taken and (B) the proposed disposition will not result in
                the contravention of any transfer restrictions applicable to the
                Purchased
                Shares under the Rules of the California Corporations
                Commissioner.

            

    

     

    
      	(v)  	
              The
                Purchaser has been furnished with, and has had access to, such information
                as he or she considers necessary or appropriate for deciding whether
                to
                invest in the Purchased Shares, and the Purchaser has had an opportunity
                to ask questions and receive answers from the Company regarding the
                terms
                and conditions of the issuance of the Purchased
                Shares.

            

    

     

    
      	(vi)  	
              The
                Purchaser is aware that his or her investment in the Company is a
                speculative investment which has limited liquidity and is subject
                to the
                risk of complete loss. The Purchaser is able, without impairing his
                or her
                financial condition, to hold the Purchased Shares for an indefinite
                period
                and to suffer a complete loss of his or her investment in the Purchased
                Shares.

            

    

     

    
      	(b)  	
              Securities
                Law Restrictions. Regardless of whether the offering and sale of
                Shares under the Plan have been registered under the Securities Act
                or
                have been registered or qualified under the securities laws of any
                state,
                the Company at its discretion may impose restrictions upon the sale,
                pledge or other transfer of the Purchased Shares (including the placement
                of appropriate legends on stock certificates or the imposition of
                stop-transfer instructions) if, in the judgment of the Company, such
                restrictions are necessary or desirable in order to achieve compliance
                with the Securities Act, the securities laws of any state or any
                other
                law.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(c)  	
              Market
                Stand-Off. In connection with any underwritten public offering by the
                Company of its equity securities pursuant to an effective registration
                statement filed under the Securities Act, including the Company’s initial
                public offering, the Purchaser shall not directly or indirectly sell,
                make
                any short sale of, loan, hypothecate, pledge, offer, grant or sell
                any
                option or other contract for the purchase of, purchase any option
                or other
                contract for the sale of, or otherwise dispose of or transfer, or
                agree to
                engage in any of the foregoing transactions with respect to, any
                Purchased
                Shares without the prior written consent of the Company or its
                underwriters. Such restriction (the “Market Stand-Off”) shall be in effect
                for such period of time following the date of the final prospectus
                for the
                offering as may be requested by the Company or such underwriters.
                In no
                event, however, shall such period exceed 180 days. The Market Stand-Off
                shall in any event terminate two years after the date of the Company’s
                initial public offering. In the event of the declaration of a stock
                dividend, a spin-off, a stock split, an adjustment in conversion
                ratio, a
                recapitalization or a similar transaction affecting the Company’s
                outstanding securities without receipt of consideration, any new,
                substituted or additional securities which are by reason of such
                transaction distributed with respect to any Shares subject to the
                Market
                Stand-Off, or into which such Shares thereby become convertible,
                shall
                immediately be subject to the Market Stand-Off. In order to enforce
                the
                Market Stand-Off, the Company may impose stop-transfer instructions
                with
                respect to the Purchased Shares until the end of the applicable stand-off
                period. The Company’s underwriters shall be beneficiaries of the agreement
                set forth in this Subsection (c). This Subsection (c) shall not apply
                to Shares registered in the public offering under the Securities
                Act, and
                the Purchaser shall be subject to this Subsection (c) only if the
                directors and officers of the Company are subject to similar
                arrangements.

            

    

     

    
      	(d)  	
              Rights
                of the Company. The Company shall not be required to (i) transfer on
                its books any Purchased Shares that have been sold or transferred
                in
                contravention of this Agreement or (ii) treat as the owner of Purchased
                Shares, or otherwise to accord voting, dividend or liquidation rights
                to,
                any transferee to whom Purchased Shares have been transferred in
                contravention of this Agreement.

            

    

     

    
      	(5)  	
              Successors
                And Assigns. 

            

    

     

    Except
      as
      otherwise expressly provided to the contrary, the provisions of this Agreement
      shall inure to the benefit of, and be binding upon, the Company and its
      successors and assigns and be binding upon the Purchaser and the Purchaser’s
      legal representatives, heirs, legatees, distributees, assigns and transferees
      by
      operation of law, whether or not any such person has become a party to this
      Agreement or has agreed in writing to join herein and to be bound by the terms,
      conditions and restrictions hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	(6)  	
              No
                Retention Rights. 

            

    

     

    Nothing
      in this Agreement or in the Plan shall confer upon the Purchaser any right
      to
      continue in Service for any period of specific duration or interfere with or
      otherwise restrict in any way the rights of the Company (or any Parent or
      Subsidiary employing or retaining the Purchaser) or of the Purchaser, which
      rights are hereby expressly reserved by each, to terminate his or her Service
      at
      any time and for any reason, with or without cause. 

     

    
      	(7)  	
              Tax
                Election.

            

    

     

    The
      acquisition of the Purchased Shares may result in adverse tax consequences
      that
      may be avoided or mitigated by filing an election under Code Section 83(b).
      Such election may be filed only within 30 days after the date of purchase set
      forth in the Summary of Stock Purchase. The form for making the Code Section
      83(b) election is attached to this Agreement as an Exhibit. The Purchaser should
      consult with his or her tax advisor to determine the tax consequences of
      acquiring the Purchased Shares and the advantages and disadvantages of filing
      the Code Section 83(b) election. The Purchaser acknowledges that it is his
      or her sole responsibility, and not the Company’s, to file a timely election
      under Code Section 83(b), even if the Purchaser requests the Company or its
      representatives to make this filing on his or her behalf.

     

    
      	(8)  	
              Legends.

            

    

     

    All
      certificates evidencing Purchased Shares shall bear the following
      legends:

     

    “THE
      SHARES REPRESENTED HEREBY MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED
      OR
      IN ANY MANNER DISPOSED OF, EXCEPT IN COMPLIANCE WITH THE TERMS OF A WRITTEN
      AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER OF THE SHARES (OR THE
      PREDECESSOR IN INTEREST TO THE SHARES). SUCH AGREEMENT GRANTS TO THE COMPANY
      CERTAIN RIGHTS OF FIRST REFUSAL UPON AN ATTEMPTED TRANSFER OF THE SHARES AND
      CERTAIN REPURCHASE RIGHTS UPON TERMINATION OF SERVICE WITH THE COMPANY. THE
      SECRETARY OF THE COMPANY WILL UPON WRITTEN REQUEST FURNISH A COPY OF SUCH
      AGREEMENT TO THE HOLDER HEREOF WITHOUT CHARGE.”

     

    “THE
      SHARES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT
      OF
      1933, AS AMENDED, AND MAY NOT BE SOLD, PLEDGED, OR OTHERWISE TRANSFERRED WITHOUT
      AN EFFECTIVE REGISTRATION THEREOF UNDER SUCH ACT OR AN OPINION OF COUNSEL,
      SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT SUCH REGISTRATION IS NOT
      REQUIRED.”

     

    If
      required by the authorities of any state in connection with the issuance of
      the
      Purchased Shares, the legend or legends required by such state authorities
      shall
      also be endorsed on all such certificates.

    reason,
      with or without cause. 

     

    
      	(9)  	
              Notice.

            

    

     

    Any
      notice required by the terms of this Agreement shall be given in writing and
      shall be deemed effective upon personal delivery or upon deposit with the United
      States Postal Service, by registered or certified mail, with postage and fees
      prepaid. Notice shall be addressed to the Company at its principal executive
      office and to the Purchaser at the address that he or she most recently provided
      to the Company.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (10)
      Entire
      Agreement. 

     

    The
      Summary of Stock Purchase, this Agreement and the Plan constitute the entire
      contract between the parties hereto with regard to the subject matter hereof.
      They supersede any other agreements, representations or understandings (whether
      oral or written and whether express or implied) which relate to the subject
      matter hereof.

     

    (11)
      Choice
      Of Law.

     

    This
      Agreement, the entire relationship of the parties hereto related to the subject
      matter hereof, and any litigation between the parties (whether grounded in
      contract, tort, statute, law or equity) shall be governed by, construed in
      accordance with, and interpreted pursuant to the laws of the State of Texas,
      without giving effect to its choice of laws principles. Exclusive venue for
      any
      litigation between the parties hereto shall be in Harris County, Texas, and
      shall be brought in the State District Courts of Harris County, Texas, or in
      the
      United States District Court for the Southern District of Texas, Houston
      Division. The parties hereto waive any challenge to personal jurisdiction or
      venue (including without limitation a challenge based on inconvenience) in
      Harris County, Texas, and specifically consent to the jurisdiction of the State
      District Courts of Harris County and the United States District Court for the
      Southern District of Texas, Houston Division.

     

    (12)
      Definitions.
      

     

    (a)
      “Agreement” shall mean this Stock Option Agreement.

     

    (b)
      “Board of Directors” shall mean the Board of Directors of the Company, as
      constituted from time to time or, if a Committee has been appointed, such
      Committee.

     

    (c)
      “Change in Control” shall mean:

     

    (1)
      The
      consummation of a merger or consolidation of the Company with or into another
      entity or any other corporate reorganization, if persons who were not
      shareholders of the Company immediately prior to such merger, consolidation
      or
      other reorganization own immediately after such merger, consolidation or other
      reorganization 50% or more of the voting power of the outstanding securities
      of
      each of (A) the continuing or surviving entity and (B) any direct or
      indirect parent corporation of such continuing or surviving entity;
      or

     

    (2)
      The
      sale, transfer or other disposition of all or substantially all of the Company’s
      assets.

     

    A
      transaction shall not constitute a Change in Control if its sole purpose is
      to
      change the state of the Company’s incorporation or to create a holding company
      that will be owned in substantially the same proportions by the persons who
      held
      the Company’s securities immediately before such transaction.

     

    (d)
      “Code” shall mean the Internal Revenue Code of 1986, as amended.

     

    (e)
      “Committee” shall mean a committee of the Board of Directors, as described in
      Section 2 of the Plan.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (f)
      “Company” shall mean Trulite, Inc., a Delaware corporation.

     

    (g)
      “Consultant” shall mean a person who performs bona fide services for the
      Company, a Parent or a Subsidiary as a consultant or advisor, excluding
      Employees and Outside Directors.

     

    (h)
      “Employee” shall mean any individual who is a common-law employee of the
      Company, a Parent or a Subsidiary. 

     

    (i)
“Fair
      Market Value” shall mean the fair market value of a Share, as determined by the
      Board of Directors in good faith. Such determination shall be conclusive and
      binding on all persons.

     

    (j)
      “Outside Director” shall mean a member of the Board of Directors who is not an
      Employee.

     

    (k)
      “Parent” shall mean any corporation (other than the Company) in an unbroken
      chain of corporations ending with the Company, if each of the corporations
      other
      than the Company owns stock possessing 50% or more of the total combined voting
      power of all classes of stock in one of the other corporations in such
      chain.

     

    (l)
      “Plan” shall mean the Trulite, Inc. 2006 Stock Option Plan, as
      amended.

     

    (m)
      “Purchased Shares” shall mean the Shares purchased by the Purchaser pursuant to
      this Agreement.

     

    (n)
      “Purchase Price” shall mean the amount for which one Share may be purchased
      pursuant to this Agreement, as specified in the Summary of Stock
      Purchase.

     

    (o)
      “Purchaser” shall mean the person named in the Summary of Stock Purchase.

     

    (p)
      “Restricted Share” shall mean a Purchased Share that is subject to the Right of
      Repurchase.

     

    (q)
      “Right of First Refusal” shall mean the Company’s right of first refusal
      described in Section 3.

     

    (r)
      “Right of Repurchase” shall mean the Company’s right of repurchase described in
      Section 2.

     

    (s)
      “Securities Act” shall mean the Securities Act of 1933, as amended.

     

    (t)
      “Service” shall mean service as an Employee, Outside Director or
      Consultant.

     

    (u)
      “Share” shall mean one share of Stock, as adjusted in accordance with
      Section 8 of the Plan (if applicable).

     

    (v)
      “Stock” shall mean the Common Stock of the Company, with no par
      value.

     

    (w)
      “Subsidiary” shall mean any corporation (other than the Company) in an unbroken
      chain of corporations beginning with the Company, if each of the corporations
      other than the last corporation in the unbroken chain owns stock possessing
      50%
      or more of the total combined voting power of all classes of stock in one of
      the
      other corporations in such chain.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (x)
      “Summary of Stock Purchase” shall mean the document so entitled to which this
      Agreement is attached.

     

    (y)
      “Transferee” shall mean any person to whom the Purchaser has directly or
      indirectly transferred any Purchased Share.

     

     

    (z)
      “Transfer Notice” shall mean the notice of a proposed transfer of Purchased
      Shares described in Section 3.Exhibit
      10.40

    

    STOCK OPTION AGREEMENT

    FOR
      THE GRANT OF

    NON-QUALIFIED
      STOCK OPTIONS UNDER THE

    TRULITE,
      INC.

    STOCK
      OPTION PLAN

    

    THIS
      AGREEMENT
      is
      entered into as of January 4, 2006 by and between Trulite, Inc., a Delaware
      corporation (“Trulite” or the “Company”), and Jenny Ligums
      (“Optionee”).

    

    WHEREAS,
      Optionee
      is has
      been
      very helpful to the company. For example, she played a significant role in
      preparing documents for a capital raise with the State of Texas. The Company
      considers it desirable and in its best interest that Optionee be given an
      inducement to acquire a proprietary interest in the Company and an added
      incentive to advance the interests of the Company by possessing an option to
      purchase shares of the common stock, $.0001 par value per share (the “Common
      Stock”) of the Company in accordance with the Trulite, Inc. Stock Option Plan
      (the “Plan”) which was adopted by the Board of Directors on April 11,
      2005.

    

    NOW,
      THEREFORE,
      in
      consideration of the premises, it is agreed as follows:

    

    1.
      DEFINITIONS

    

    For
      purposes of this Agreement, any capitalized terms used herein and not defined
      herein shall have the meaning provided in the Plan and the following terms
      shall
      have the definitions indicated:

     

    (a)
      Date
      of Grant - the date of this Agreement, January 4, 2006.

     

     

    (b)
      Exercise Date - date that the Option or any portion thereof, as the context
      requires, is exercised.

     

    2.
      GRANT OF OPTION

    

    Subject
      to the provisions of the Plan, the Company hereby grants to Optionee the right,
      privilege and option to purchase (the “Option”) 5,000 shares of Common Stock
      (the “Option Shares”) at a price of $0.88 per share (the “Grant Price”), which
      has been determined by the Board of Directors to be equal to the Fair Market
      Value of a share of Common Stock on the Date of Grant. The Option shall be
      exercisable in the amounts and at the times specified in Section 3 below. The
      number of Option Shares and the Grant Price have been adjusted to reflect a
      five-for-one stock split of the Trulite common stock to be effective in April
      2005. The Option is a non-qualified stock option and shall not be treated as
      an
      incentive stock option.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    3.
      VESTING AND EXERCISE OF OPTIONS

    
       

      
        	  3.1  	
                
                  The
                    Option shall vest as provided below:
                    

                

              

      

       

    

    
      	 	
               

              With
                respect to 18.5% of the Option Shares

               

            	
               

              One
                year after the Date of Grant

               

            
	 	
               

              With
                respect to an additional 22.5% of the Option Shares

               

            	
               

              Two
                years after the Date of Grant

               

            
	 	
               

              With
                respect to an additional 26.5% of the Option Shares

               

            	
               

              Three
                years after the Date of Grant

               

            
	 	
               

              With
                respect to an additional 32.5% of the Option Shares

               

            	
               

              Four
                years after the Date of Grant

               

            

    

    

     

    
      	3.2  	
              The
                Option may not be exercised later than seven years after the Date
                of
                Grant.

            

    

     

     

    
      	3.3  	
              (a)
                If
                some or all of the shareholders of Trulite on the Date of Grant (the
                “Current Shareholders”) enter into a definitive agreement to sell to a
                third party (an “Acquiring Party”) some or all of the shares of Common
                Stock held by the Current Shareholders and the proposed sale will
                result
                in the Current Shareholders having voting power with respect to less
                then
                50% of the voting securities entitled to vote in the election of
                directors
                of Trulite, the Board may require the Optionee to exercise the vested
                portion of the Option and sell the Option Shares to the Acquiring
                Party or
                to the Current Shareholders, on the same terms and conditions, including
                prices, as the Acquiring Party is acquiring the shares from the Current
                Shareholders. Following the sale to the Acquiring Party, the unvested
                portion of the Option shall continue to be subject to the vesting
                terms
                provided herein.

            

    

     

    (b)
       In
      the
      event of (1)
      a sale
      of all or substantially all of the assets of the Company or (2)
      a
      merger, consolidation or reorganization involving Trulite, following which
      the
      Current Shareholders will have voting power with respect to less than 50% of
      the
      voting securities entitled to vote generally in the election of directors of
      the
      surviving entity, the Board can require that all vested Options be exercised
      at
      the time of effectiveness of the asset sale, merger, consolidation or
      reorganization and that, if not exercised, shall be forfeited. All Options
      not
      exercised at the time of the asset sale, merger, consolidation or reorganization
      and not required to be forfeited, shall be assumed by any acquiring or surviving
      entity on the same terms and shall become equivalent options to acquire
      securities of such acquiring or surviving entity.

     

    (c) In
      the
      event of a “Change of Control” (that is, (i) a sale of all or substantially all
      of the assets or (ii) a merger, consolidation or reorganization involving
      Trulite, all options held by the Optionee on record as of January 4, 2006 will
      be subject to accelerated vesting. Board approval will not be required under
      these terms and conditions. It should be noted that these terms and conditions
      do not include the purchase of Trulite by Synexus or vice versa nor does it
      include a public offering or reverse merger of Trulite/Synexus into a public
      entity. 

     

    
      	 	
              3.4

            	
              Notwithstanding
                the foregoing, the Board may at any time in its sole discretion declare
                any outstanding Options to be fully vested and immediately exercisable
                in
                full or in part.

            

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    

    4. METHOD
      OF EXERCISE OF OPTION

     

    Optionee
      may exercise all or a portion of the Option by delivering to the Board a signed
      written notice of her intention to exercise the Option, specifying therein
      the
      number of shares to be purchased. Upon receiving such notice, and after the
      Board has received full payment of the Grant Price for the Option Shares being
      acquired, the Board shall direct the appropriate officer of the Company to
      transfer title to the Option Shares purchased to Optionee on the Company’s stock
      records and to issue to Optionee a stock certificate for the number of Option
      Shares being acquired. Optionee shall not have any rights as a shareholder
      until
      the stock certificate is issued to her.

     

    The
      Option may be exercised by the payment of the Grant Price in cash or by
      check.

     

    5.
      COMPLIANCE
      WITH APPLICABLE LAW

    

    No
      shares
      may be issued upon exercise of the Option unless such issuance is in compliance
      with the Delaware General Corporation Law, as in effect on the date of such
      issuance. It is the intention of the Company to effect full compliance with
      all
      securities and other applicable laws with respect to the sale of Option Shares
      pursuant to the exercise of Options hereunder and subsequent resales by the
      Optionee. The Company shall not be required to sell and deliver Option Shares
      hereunder upon exercise of these Options in whole or part until the Optionee
      shall have made such representations and agreed to the legending of stock
      certificates in a fashion as may reasonably be required by the Company's counsel
      to effect compliance with all applicable securities or other laws.

    

    6. RESTRICTION
      ON TRANSFER OF OPTION SHARES

    

    Unless
      the Common Stock is publicly traded, there will be no market for the Option
      Shares and the Option Shares will be subject to restrictions on transfer imposed
      by law, the Plan and this Agreement, as well as an Investors Rights Agreement
      and a Right of First Refusal and Co-Sale Agreement to which Optionee will be
      obligated to become a party upon exercise of the Option. By signing this
      Agreement, Optionee represents that any purchase of Option Shares upon exercise
      of an Option, prior to the Common Stock becoming publicly traded, will be for
      investment purposes without an intention to resell the Option Shares for a
      substantial period of time. No transfer of Option Shares will be recognized
      by
      the Company, unless in the opinion of counsel to the Company such transfer
      will
      not result in a violation of applicable securities laws.

    

    7.
      BINDING EFFECT

    

    This
      Agreement shall inure to the benefit of and be binding upon the parties hereto
      and their respective heirs, executors, administrators and
      successors.

    

    8.
      INCONSISTENT PROVISIONS

    

    The
      Option granted hereby is subject to the provisions of the Plan as in effect
      on
      the date hereof. If any provision of this Agreement conflicts with such a
      provision of the Plan, the Plan provision shall control.

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    9.
      SEVERABILITY

    

    If
      a
      court of competent jurisdiction determines that any provision of this Agreement
      is invalid or unenforceable, then the invalidity or unenforceability of that
      provision shall not affect the validity or enforceability of any other provision
      of this Agreement, and all other provisions shall remain in full force and
      effect.

     

    

    IN
      WITNESS WHEREOF the parties hereto have caused this Agreement to be executed
      on
      the day and year first above written.

     

    
      	 	 	 
	 	TRULITE,
              INC.
	 
 	 
 	 
 
	 	By:  	
	 	
              
                
President
                and
                CEO

            

      	 	 	 
	 	 
	 
 	 
 	 
 
	 	  	
	 	
              
                
Ms.
                Jenny
                Ligums

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