Document:

March
      12,
      2008

     

    By
      Hand
      Delivery

    Mr.
      Stuart
      Schreiber

    The
      Small Business
      Company

    674
      Via de La
      Valle, Suite 225

    Solana
      Beach, CA
      92075

    

    Re:  Resignation
      of
      Employment and Release Of All Claims Agreement

     

    Dear
      Stuart:

     

    You
      have agreed to
      resign from your position as President, Chief Executive Officer, and Chief
      Financial Officer., a Delaware corporation (the “Company”). Accordingly, the
      Company will provide you with the following severance benefits in exchange
      for
      your resignation and a release of all claims that you may have against the
      Company. 

     

    This
      letter
      agreement (the “Letter Agreement”), which is made and entered into by the
      parties as of Effective Date (as defined in Section E.2), documents the terms
      of
      your severance from the Company’s employment. 

     

    Now,
      therefore, in
      consideration of the mutual promises contained in this Letter Agreement, you
      and
      the Company agree, covenant, and represent as follows: 

    

    A. Resignation
      and
      Termination Of Employment; Consideration.

     

    1. You
      agree to resign
      from all positions of employment with the Company, including, but not limited
      to, your positions as President, Chief Executive Officer, Chief Financial
      Officer and Treasurer and the Company will accept your resignation, effective
      February 29, 2008 (the “Termination Date”). You shall also resign your position
      as Chairman of the Board of Directors. However, notwithstanding Section 5(c)
      of
      your Employment Agreement (as defined below), the Company will allow you to
      maintain your position as a director until the next election of the board of
      directors. You and the Company hereby agree to waive any and all continuing
      rights and obligations, if any, under your Employment Agreement dated December
      26, 2002, and as amended from time to time (“Employment Agreement”), which the
      parties agree has expired and is of no further force or effect.

    

    2. The
      Company shall
      pay to you, as consideration for your agreement to resign and enter into this
      Letter Agreement, the total gross amount of $9,727,95, of which $4,727.95 is
      for
      reimbursement of our of pocket business expenses and $5,000 is for repayment
      of
      an outstanding loan (the “Termination Payment”). The Termination Payment shall
      be paid as follows: $5,000 on the Effective Date and thereafter, in equal
      semi-monthly installments of $1,000, which shall be paid on the first of each
      month starting April 1, 2008, until the entire Termination Payment has been
      made. The Company will withhold from the Termination Payment all applicable
      payroll taxes, including federal and state income taxes, as well as other
      authorized deductions. You acknowledge that, upon receipt of the final
      installation of the Termination Payment, you will have been paid all wages,
      all
      unreimbursed business expenses, and all accrued but unused vacation pay due
      and
      owing to you as of the Termination Date of this Agreement, and you waive any
      unpaid salary or wage amounts, unreimbursed business expenses, and accrued
      but
      unused vacation pay.

    

    3. You
      will retain
      ownership of 6,300,000 shares of the Company’s common stock currently held by
      you. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    
      	 	
              B.

            	
              The
                Company’s Responsibilities.

            

    

    

    1. The
      Company shall
      withhold from the Termination Payment all state, federal or other taxes, as
      well
      as any other authorized deductions. 

    

    2. You
      and the Company
      agree, covenant and represent that you shall not be eligible for, or entitled
      to
      receive, any severance benefits, stock, stock options, or any other benefits
      other than those specifically identified in this Letter Agreement.

     

    
      	 	
              C.

            	
              Your
                Duties And Responsibilities.

            

    

    

    1. You
      hereby agree
      that you will keep confidential and will not reveal to anyone any information
      whatsoever obtained in the course of you employment relating to any aspect
      whatsoever of the Company’s business, strategies decision making process,
      finances, customers, customer lists, purchasing and trade practices, strategies,
      financial information, sources or related information, to any other person,
      company, entity group or individual, to the extent that you obtained such
      knowledge or information while employed by the Company (“Confidential
      Information”), except
      that you are
      not precluded from responding to any inquiry about the Company, your employment,
      or this Letter Agreement to any self regulatory organization, regulatory,
      administrative or governmental agency, in response to judicial process or as
      may
      be necessary with regard to the preparation and filings with the Internal
      Revenue Service.

     

    2. To
      forestall any
      use or disclosure of Confidential Information in breach of this Letter
      Agreement, you agree, covenant, and represent that, during the period commencing
      with the Termination Date and for one year thereafter, you will not directly
      or
      indirectly through any person, firm, corporation, or other business entity
      engage in any activity in competition with the Company’s product opportunities
      during your tenure, make any financial investment (except that you may own
      up to
      2% of the shares in a publicly traded company that may compete with the
      Company’s product opportunities during your tenure, or provide other services to
      a business or individual engaged in competition with the Company’s product
      opportunities during your tenure. If you violate the terms of this Section
      C.2,
      the Company’s obligation to pay installments of the Termination Payments Section
      A.2.a of this Letter Agreement will immediately cease. However, all other terms
      of this Letter Agreement shall remain in full force and effect. 

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    3. You
      acknowledge
      that the Company’s relationships with its employees, affiliates, consultants,
      customers, clients, business associates, and other persons are valuable business
      assets. To forestall any interference with these relationships, you agree,
      covenant, and represent that during the period commencing with the Termination
      Date and for one year thereafter, you will not directly or indirectly through
      any person, firm, corporation, or other business entity: (a) divert or attempt
      to divert from the Company any business of any kind in which it is engaged,
      including, without limitation, the solicitation, initiation of contact with,
      or
      interference with any of its suppliers or customers; or (b) employ, solicit
      for
      employment, or recommend for employment any person employed by the Company.
      If
      you violate the terms of this Section C.3, the Company’s obligation to pay
      installments of the Termination Payments Section A.2.a of this Letter Agreement
      will immediately cease. However, all other terms of this Letter Agreement shall
      remain in full force and effect. 

    

    4. You
      further agree,
      covenant, and represent that you will not take any action or make any comments
      that actually or potentially disparage, disrupt, damage, impair, or otherwise
      interfere with the Company’s business interests or reputation, except
      that you are
      not precluded from responding to any inquiry about the Company, your employment,
      or this Letter Agreement to any self regulatory organization, regulatory,
      administrative or governmental agency, in response to judicial process or as
      may
      be necessary with regard to the preparation and filings with the Internal
      Revenue Service.

    

    
      	 	
              D.

            	
              Release
                Provisions.

            

    

     

    1. In
      exchange for the
      consideration described in this Letter Agreement, including the Termination
      Payment, and for other good and valuable consideration, the receipt and adequacy
      of which are hereby acknowledged, you for yourself and for your heirs, assigns,
      executors, administrators, agents and successors, past and present
      (collectively, the “Employee Affiliates”), hereby fully and without limitation
      release, covenant not to sue, and forever discharge the Company and its
      subsidiaries, parent companies, divisions, affiliated corporations, affiliated
      partnerships, trustees, directors, officers, shareholders, partners, agents,
      representatives, employees, consultants, insurance carriers, attorneys, heirs,
      assigns, executors and administrators, predecessors and successors, past and
      present (the “Releasees”), both individually and collectively, from any and all
      rights, claims, demands, liabilities, charges, complaints, obligations,
      promises, agreements, controversies, debts, actions and causes of action whether
      in law or in equity, suits, damages, losses, workers’ compensation claims,
      attorneys’ fees, costs, and expenses, of whatever nature whatsoever, known or
      unknown, fixed or contingent, suspected or unsuspected (“Claims”), that you or
      the Employee Affiliates now have, or may ever have, against the Company or
      any
      of the other Releasees for any acts or omissions by the Company or any of the
      other Releasees occurring prior to the Effective Date of this Agreement. Without
      limiting the generality of the foregoing, this Release applies to any Claims
      that you or the Employee Affiliates now have, or may ever have, against the
      Company or any of the other Releasees that arise out of, or are in any manner
      related to any of the following: (i) your employment by the Company or any
      of
      the other Releasees; (ii) the termination of your employment with the Company
      or
      any of the other Releasees; and (iii) any transactions, occurrences, acts
      or omissions by the Company or any of the other Releasees occurring prior to
      the
      Effective Date of this Agreement.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    2. Without
      limiting
      the generality of the foregoing, you specifically and expressly release any
      Claims against the Company and the other Releasees occurring prior to the
      Effective Date of this Agreement arising out of or related to violations of
      any
      federal or state employment discrimination law, including Executive Order 11141,
      the Age Discrimination In Employment Act, Title VII of the Civil Rights Act
      of
      1964, 29 U.S.C. §1981 et.
      seq.,
      the Americans
      With Disabilities Act, the National Labor Relations Act, the Fair Labor
      Standards Act, the Equal Pay Act, the Rehabilitation Act of 1974, the Employee
      Retirement Income Security Act of 1974, and any analogous laws under the state
      of New York, as well as Claims arising out of or related to violations of the
      provisions of state and federal wage and hour laws, breach of contract, express
      or implied, any covenant of good faith and fair dealing, express or implied,
      fraud, misrepresentation, common counts, unfair competition, unfair business
      practices, negligence, defamation, infliction of emotional distress, invasion
      of
      privacy, assault, battery, false imprisonment, wrongful termination, and any
      other state or federal law, rule, or regulation.

    

    3. You
      agree,
      covenant, and represent that you have not suffered any work-related injuries
      while employed by the Company, that you have no intention to file any claim
      for
      workers’ compensation benefits of any type against the Company, and that you
      will not file or attempt to file any claims for workers’ compensation benefits
      of any type against the Company. You acknowledge that the Company has relied
      upon these covenants and representations, and that the Company would not have
      entered into this Letter Agreement but for these covenants and representations.
      As a result, you agree, covenant, and represent that the Company may, but is
      not
      obligated to, submit this Letter Agreement to the Workers’ Compensation Appeals
      Board for approval as a compromise and release as to any such new or unasserted
      workers’ compensation claims.

    

    4. In
      exchange for the
      consideration described in this Letter Agreement, and for other good and
      valuable consideration, the receipt and adequacy of which are hereby
      acknowledged, the Company, for itself and its subsidiaries, parent companies,
      divisions, affiliated corporations, affiliated partnerships, trustees,
      directors, officers, shareholders, partners, agents, representatives, employees,
      consultants, insurance carriers, attorneys, heirs, assigns, executors and
      administrators, predecessors and successors, past and present hereby fully
      and
      without limitation releases, covenants not to sue, and forever discharge you
      for
      yourself and for your heirs, assigns, executors, administrators, agents and
      successors, past and present, both individually and collectively, from any
      and
      all rights, claims, demands, liabilities, charges, complaints, obligations,
      promises, agreements, controversies, debts, actions and causes of action whether
      in law or in equity, suits, damages, losses, attorneys’ fees, costs, and
      expenses, of whatever nature whatsoever, known or unknown, fixed or contingent,
      suspected or unsuspected, that the Company now have, or may ever have, against
      you for any acts or omissions by you occurring prior to the Effective Date
      of
      this Agreement. 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    E.  Older
      Worker’s
      Benefit Protection Act.

    

    1. This
      Agreement is
      subject to the terms of the Older Workers Benefit Protection Act of 1990 (the
      “OWBPA”). The OWBPA provides that an individual cannot waive a right or claim
      under the Age Discrimination in Employment Act (“ADEA”) unless the waiver is
      knowing and voluntary. Pursuant to the terms of the OWBPA, you acknowledge
      and
      agree that you have executed this Agreement voluntarily, and with full knowledge
      of its consequences. 

     

    2. In
      addition, you
      hereby acknowledge and agree that: (a) this Letter Agreement has been
      written in a manner which you fully understand; (b) the release provisions
      of
      this Agreement apply to any rights you may have under the ADEA, including the
      right to file a lawsuit against the Company for age discrimination; (c) the
      release provisions of this Agreement do not apply to any rights or claims that
      you may have under the ADEA that arise after the date that you execute this
      Agreement; (d) the Company does not have a preexisting duty to pay the severance
      and other payments identified in this Agreement; (e) you have the right to
      consult with an attorney prior to executing this Agreement; (f) you will have
      a
      period of 21 days in which to consider the terms of this Agreement prior to
      its
      execution; and (g) you will have a period of seven days after execution of
      this
      Agreement in which to revoke this Agreement. You further understand that this
      Agreement shall not become effective until expiration of this seven-day period
      (the “Effective Date”). 

     

    F. Non-Admission
      of
      Liability.

    

    You
      agree,
      covenant, and represent that this Letter Agreement constitutes a compromise
      of,
      and full accord and satisfaction of, any and all claims that you may have
      against the Company or any other Releasee. You further agree, covenant, and
      represents that this Agreement shall not be treated as an admission of liability
      by the Company, at any time or for any purpose, and may not be used in any
      other
      proceeding, except a proceeding to enforce or interpret the terms of this Letter
      Agreement.

    

    

    G.
Arbitration.

    

    All
      disputes
      between you (and your attorneys, successors, and assigns) and the Company and/or
      any other Releasee which arise out of or relate in any manner whatsoever to
      your
      employment with, or the termination of your employment with, the Company
      (“Arbitrable Claims”) including, without limitation, all disputes relating to
      the validity, interpretation, or enforcement of this Letter Agreement, shall
      be
      resolved exclusively by arbitration in San Diego, California, by the Judicial
      Arbitration & Mediation Services, Inc. (“JAMS”), before one or more
      experienced employment arbitrators licensed to practice law in California.
      Such
      arbitration shall be conducted in accordance with the then-existing arbitration
      rules of JAMS. The parties to this Agreement, and all who claim thereunder,
      shall be (i) conclusively bound by the arbitrator’s decision or award,
      which shall not be subject to appeal; and (ii) have the right to have any
      decision or award rendered in accordance with this provision entered as a
      judgment in a court in the State of California or any other court having
      jurisdiction. The arbitrator shall have the authority to award or grant legal,
      equitable, and declaratory relief. The parties hereby waive any rights they
      may
      have to trial by jury. The Federal Arbitration Act will govern the
      interpretation and enforcement of this Section. The prevailing party in any
      such
      arbitration shall be awarded its costs, expenses, and actual attorney’s fees
      incurred in connection with the arbitration. You and the Company shall each
      be
      responsible for payment of one-half of the amount of the arbitrator’s fee(s).
      The parties specifically agree that the exclusive venue of such arbitration
      shall be San Diego, California. 

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    H. Severability.

    

    The
      parties to this
      Agreement agree, covenant and represent that each and every provision of this
      Agreement shall be deemed to be contractual, and that they shall not be treated
      as mere recitals at any time or for any purpose. Therefore, the parties further
      agree, covenant and represent that each and every provision of this Agreement
      shall be considered severable, except for the release provisions of Sections
      D
      of this Agreement. If a court of competent jurisdiction finds the release
      provisions of Section D of this Agreement to be unenforceable or invalid, then
      this Agreement shall become null and void, and you will repay any and all
      settlement payments made by the Company pursuant to this Agreement within a
      reasonable period of time not to exceed 30 days. If a court of competent
      jurisdiction finds any provision other than the release provisions of Section
      D,
      or part thereof, to be invalid or unenforceable for any reason, that provision,
      or part thereof, shall remain in force and effect to the extent allowed by
      law,
      and all of the remaining provisions of this Agreement shall remain in full
      force
      and effect and enforceable.

     

    
      	 	
              I.

            	
              General
                Provisions.

            

    

    

    1. You
      represent and
      warrant that you have not assigned or transferred any interest in any Claims
      that you may have against the Company or any of the other Releasees.
      Accordingly, you agree to indemnify and hold the Company and the Releasees
      harmless from any liability, claims, demands, damages, expenses, and attorneys’
fees incurred by the Company or any Releasee as a result of any person or entity
      asserting any such assignment or transfer of any right or claim. You understand
      and agree that this Letter Agreement may be pleaded as a defense,
      cross-complaint, counter-suit, cross-claim, or third party complaint in any
      action involving the Company or any other Releasee.

    

    2. You
      and the Company
      agree, covenant, and represent that this Letter Agreement and its attachments
      and the Consulting Agreement constitute a single, integrated written contract
      expressing the entire agreement of the parties hereto, and that this Letter
      Agreement supersedes and completely replaces the terms of any other agreement
      that you may have ever had with the Company or any other Releasee. There is
      no
      other agreement, written or oral, express or implied, between you and the
      Company with respect to the subject matter hereof. This Letter Agreement may
      not
      be orally modified, and may only be modified in a written instrument signed
      by
      all parties.

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    3. This
      Letter
      Agreement has been negotiated and entered into in the State of California,
      and
      is to be performed in San Diego, California. This Letter Agreement shall be
      governed by and interpreted in accordance with the laws of the State of
      California, including all matters of construction, validity, performance, and
      enforcement, without regard to California’s conflict of law rules.

     

    4. This
      Letter
      Agreement shall be binding upon and shall inure to the benefit of the respective
      heirs, assigns, executors, administrators, successors, subsidiaries, divisions
      and affiliated corporations and partnerships, past and present, and trustees,
      directors, officers, shareholders, partners, agents and employees, past and
      present, of you and the Company.

     

    5. The
      captions and
      section numbers in this Agreement are inserted for the reader’s convenience, and
      in no way define, limit, construe, or describe the scope or intent of the
      provisions of this Agreement.

     

    6. This
      Agreement has
      been reviewed by the parties. The parties have had a full opportunity to
      negotiate the terms and conditions of this Agreement. Accordingly, the parties
      expressly waive any common-law or statutory rule of construction that
      ambiguities should be construed against the drafter of this Agreement, and
      agree, covenant, and represent that the language in all parts of this Agreement
      shall be in all cases construed as a whole, according to its fair
      meaning.

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    By
      your signature
      below, you confirm that you accept and agree to all of the provisions contained
      in this Letter Agreement, and that you are executing this Letter Agreement
      voluntarily, with full understanding of its consequences.

     

    
      	 	 	 
	 	THE
              SMALL BUSINESS COMPANY
	 
 	 
  
                                                                             
	 	
              By:
                David
                Larson, Chief Operating 

                    Officer

            

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    

    ACKNOWLEDGMENT
      AND AGREEMENT

     

    
      I
        HAVE READ THE FOREGOING LETTER AGREEMENT AND ACCEPT AND AGREE TO ALL OF THE
        PROVISIONS CONTAINED THEREIN, AND HEREBY EXECUTE IT VOLUNTARILY, WITH FULL
        UNDERSTANDING OF ITS CONSEQUENCES. I FURTHER ACKNOWLEDGE AND UNDERSTAND THAT
        THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. 

       

      IF
        THIS LETTER AGREEMENT IS SIGNED BEFORE THE 21-DAY REVIEW PERIOD EXPIRES,
        YOU
        ACKNOWLEDGE AND AGREE THAT YOU HAVE VOLUNTARILY WAIVED THE REVIEW
        PERIOD.

    

     

    
      	 	 	 	 
	 	 	 	 
	
              
                
            Stuart
                Schreiber

            	 	 	
              
                Date

    

     

    
      
        
        

      

      
        9EXECUTIVE
      EMPLOYMENT AGREEMENT

    

    This
      EMPLOYMENT
      AGREEMENT is made and entered into effective as of March 14, 2008 (the
“Effective Date”) by and between The Small Business Company (the “Company”), and
      Terry Ostrowiak, the undersigned individual (“Executive”).

     

    RECITAL

     

    The
      Company and
      Executive desire to enter into an Employment Agreement setting forth the terms
      and conditions of Executive’s employment with the Company.

     

    AGREEMENT

     

    NOW,
      THEREFORE, in
      consideration of the mutual covenants and agreements hereinafter set forth,
      the
      Company and Executive agree as follows:

     

    1. Employment.

     

    (a) Term.
      The Company
      hereby employs Executive to serve as Secretary of the Company and Executive
      Vice
      President and to serve in such additional or different position or positions
      as
      the Company may determine in its sole discretion. As Secretary and Executive
      Vice President, the Executive shall be an Officer of the Company. The term
      of
      employment shall be for a period of one (1) year (“Employment Period”) to
      commence on the Effective Date, and renewable at the Company’s discretion on
      each anniversary.

     

    (b) Duties
      and
      Responsibilities.
      Executive will be
      responsible for the formation and implementation of the Company’s Small Business
      Coaching Program and other duties as agreed upon with the Company’s Board of
      Directors. The Executive shall report to the Company’s Board of Directors.

     

    (c) Location.
      The initial
      principal location at which Executive shall perform services for the Company
      shall be at 674 Via de La Valle, Suite 226, Solana Beach, CA 92075.

     

    2. Compensation.

     

    (a) Base
      Salary.
      Executive shall
      be paid a base salary (“Base Salary”) at the annual rate of $120,000, payable
      twice monthly consistent with Company’s payroll practices. The annual Base
      Salary shall be reviewed on an annual basis by the Board of Directors or
      Compensation Committee to determine if such Base Salary should be increased
      in
      recognition of services to the company.

     

    (b) Payment.
      Payment of all
      compensation to Executive hereunder shall be made in accordance with the
      relevant Company policies in effect from time to time, including normal payroll
      practices, and shall be subject to all applicable employment and withholding
      taxes. It is understood and agreed to, by both the Executive and the Company,
      that payment of the agreed to salary will not commence until the Company has
      received funding or revenues sufficient to support the payment of salaries
      to
      employees. Additionally, the Executive and the Company agree that should cash
      shortfalls preclude payment of the Executive’s salary that any unpaid salary
      shall NOT be accrued. 

     

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

     

    (c) Bonus.
      Executive shall
      also be entitled to a one-time bonus of $16,667 upon receipt of funding
      sufficient to support payment to employees, as set forth under Section 2(b)
      above, subject to the discretion of the Board of Directors. Other bonus payments
      shall be determined at the sole discretion of the Board of
      Directors.

     

    3. Other
      Employment
      Benefits.

     

    (a) Business
      Expenses.
      Upon submission
      of itemized expense statements in the manner specified by the Company, Executive
      shall be entitled to reimbursement for reasonable travel and other reasonable
      business expenses duly incurred by Executive in the performance of his duties
      under this Agreement.

     

    (b) Benefit
      Plans.
      Executive shall
      be entitled to participate in the Company’s medical and dental plans, life and
      disability insurance plans and retirement plans pursuant to their terms and
      conditions and once implemented by the Company. It is understood by the
      Executive that no Benefit Plan currently exists but that the Executive shall
      immediately be entitled to Benefits once a Plan is executed and in force. There
      is no accrual of benefits prior to execution and implementation of Plan.
      Executive shall be entitled to participate in any other benefit plan offered
      by
      the Company to its employees during the term of this Agreement (other than
      stock
      option or stock incentive plans, which are governed by Section 3(d) below).
      Nothing in this Agreement shall preclude the Company or any affiliate of the
      Company from terminating or amending any employee benefit plan or program from
      time to time. 

     

    (c) Vacation.
      Executive shall
      be entitled to three (3) weeks of vacation each year of full employment,
      exclusive of legal holidays, as long as the scheduling of Executive’s vacation
      does not interfere with the Company’s normal business operations.

     

    (d) Stock
      Options.
      Executive shall
      be entitled to options to acquire 500,000 shares of the Common Stock of the
      Company pursuant to the terms of our 2007 Stock Plan. Issuance of the options
      shall be in accordance with all applicable securities laws and the other terms
      and conditions of our 2007 Stock Incentive Plan and the stock option agreement
      to be executed between the Company and Executive (the “Stock Option Agreement”).

     

    (e) No
      Other
      Benefits.
      Executive
      understands and acknowledges that the compensation specified in Sections 2
      and 3 of this Agreement shall be in lieu of any and all other compensation,
      benefits and plans.

     

    4. Executive’s
      Business Activities.
      Executive shall
      devote the substantial portion of his entire business time, attention and energy
      exclusively to the business and affairs of the Company and its affiliates,
      as
      its business and affairs now exist and as they hereafter may be changed.
      (Executive may serve as a member of the Board of Directors of other
      organizations that do not compete with the Company, and may participate in
      other
      professional, civic, governmental organizations and activities that do not
      materially affect his ability to carry out his duties hereunder.)

     

    5. Termination
      of
      Employment.

     

    (a) For
      Cause.
      Notwithstanding
      anything herein to the contrary, the Company may terminate Executive’s
      employment hereunder for cause for any one of the following reasons:
      (1) conviction
      of a felony, any act involving moral turpitude, or a misdemeanor where
      imprisonment is imposed; (2) commission
      of any act of theft, fraud, dishonesty, or falsification of any employment
      or
      Company records; (3) improper
      disclosure of the Company’s confidential or proprietary information;
      (4) any
      action
      by the Executive which has a detrimental effect on the Company’s reputation or
      business; (5) Executive’s
      failure or inability to perform any reasonable assigned duties after written
      notice from the Company of, and a reasonable opportunity to cure, such failure
      or inability; (6) any
      breach
      of this Agreement, which breach is not cured within ten (10) days following
      written notice of such breach; (7) a
      course of
      conduct amounting to gross incompetence; (8) chronic
      and
      unexcused absenteeism; (9) unlawful
      appropriation of a corporate opportunity; or (10) misconduct
      in connection with the performance of any of Executive’s duties, including,
      without limitation, misappropriation of funds or property of the Company,
      securing or attempting to secure personally any profit in connection with any
      transaction entered into on behalf of the Company, misrepresentation to the
      Company, or any violation of law or regulations on Company premises or to which
      the Company is subject. Upon termination of Executive’s employment with the
      Company for cause, the Company shall be under no further obligation to
      Executive, except to pay all accrued but unpaid base salary and accrued vacation
      to the date of termination thereof.

     

    
      
        
        

      

      
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    (b) Without
      Cause.
      The Company may
      terminate Executive’s employment hereunder at any time without cause, provided,
      however, that Executive shall be entitled to severance pay in the amount of
      four
      (4) weeks of Base Salary in addition to accrued but unpaid Base Salary and
      accrued vacation, less deductions required by law, but if, and only if,
      Executive executes a valid and comprehensive release of any and all claims
      that
      the Executive may have against the Company in a form provided by the Company
      and
      Executive executes such form within seven (7) days of tender.

     

    (c) Resignation.
      Upon termination
      of employment, Executive shall be deemed to have resigned from the Board of
      Directors of the Company if he is a director.

     

    (d) Cooperation.
      After notice of
      termination, Executive shall cooperate with the Company, as reasonably requested
      by the Company, to effect a transition of Executive’s responsibilities and to
      ensure that the Company is aware of all matters being handled by
      Executive.

     

    6. Disability
      of
      Executive.
      The Company may
      terminate this Agreement without liability if Executive shall be permanently
      prevented from properly performing his essential duties hereunder with
      reasonable accommodation by reason of illness or other physical or mental
      incapacity for a period of more than one hundred twenty 120 consecutive days.
      Upon such termination, Executive shall be entitled to all accrued but unpaid
      Base Salary and vacation.

     

    7. Death
      of
      Executive.
      In the event of
      the death of Executive during the Employment Period, the Company’s obligations
      hereunder shall automatically cease and terminate; provided, however, that
      within 15 days the Company shall pay to Executive’s heirs or personal
      representatives Executive’s Base Salary and accrued vacation accrued to the date
      of death.

     

    8. Confidential
      Information and Invention Assignments.
      Executive is
      simultaneously executing a Confidential Information and Invention Assignment
      Agreement (the “Confidential Information and Invention Assignment Agreement”).
      The obligations under the Confidential Information and Invention Assignment
      Agreement shall survive termination of this Agreement for any
      reason.

     

    9. Exclusive
      Employment.
      During employment
      with the Company, Executive will not do anything to compete with the Company’s
      present or contemplated business, nor will he plan or organize any competitive
      business activity. Executive will not enter into any agreement which conflicts
      with his duties or obligations to the Company. Executive will not during his
      employment or within one (1) year after it ends, without the Company’s express
      written consent, directly or indirectly, solicit or encourage any employee,
      agent, independent contractor, supplier, customer, consultant or any other
      person or company to terminate or alter a relationship with the
      Company.

     

    
      
        
        

      

      
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    10. Assignment
      and
      Transfer.
      Executive’s
      rights and obligations under this Agreement shall not be transferable by
      assignment or otherwise, and any purported assignment, transfer or delegation
      thereof shall be void. This Agreement shall inure to the benefit of, and be
      binding upon and enforceable by, any purchaser of substantially all of Company’s
      assets, any corporate successor to Company or any assignee thereof.

     

    11. No
      Inconsistent
      Obligations.
      Executive is
      aware of no obligations, legal or otherwise, inconsistent with the terms of
      this
      Agreement or with his undertaking employment with the Company. Executive will
      not disclose to the Company, or use, or induce the Company to use, any
      proprietary information or trade secrets of others. Executive represents and
      warrants that he or she has returned all property and confidential information
      belonging to all prior employers.

     

    12. Miscellaneous.

     

    (a) Attorneys’
      Fees.
      Should either
      party hereto, or any heir, personal representative, successor or assign of
      either party hereto, resort to legal proceedings in connection with this
      Agreement or Executive’s employment with the Company, the party or parties
      prevailing in such legal proceedings shall be entitled, in addition to such
      other relief as may be granted, to recover its or their reasonable attorneys’
fees and costs in such legal proceedings from the non-prevailing party or
      parties; provided, however, that nothing herein is intended to affect the
      provisions of Section 12(l).

     

    (b) Governing
      Law.
      This Agreement
      shall be governed by and construed in accordance with the laws of the State
      of
      California without regard to conflict of law principles.

     

    (c) Entire
      Agreement.
      Except with
      respect to the 2007 Stock Incentive Plan and Stock Option Agreement referenced
      in Section 3(d), this Agreement, together with the attached exhibits and
      the Confidential Information and Invention Assignment Agreement, contains the
      entire agreement and understanding between the parties hereto and supersedes
      any
      prior or contemporaneous written or oral agreements, representations and
      warranties between them respecting the subject matter hereof.

     

    (d) Amendment.
      This Agreement
      may be amended only by a writing signed by Executive and by a duly authorized
      representative of the Company.

     

    (e) Severability.
      If any term,
      provision, covenant or condition of this Agreement, or the application thereof
      to any person, place or circumstance, shall be held to be invalid, unenforceable
      or void, the remainder of this Agreement and such term, provision, covenant
      or
      condition as applied to other persons, places and circumstances shall remain
      in
      full force and effect.

     

    (f) Construction.
      The headings and
      captions of this Agreement are provided for convenience only and are intended
      to
      have no effect in construing or interpreting this Agreement. The language in
      all
      parts of this Agreement shall be in all cases construed according to its fair
      meaning and not strictly for or against the Company or Executive.

     

    
      
        
        

      

      
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    (g) Rights
      Cumulative.
      The rights and
      remedies provided by this Agreement are cumulative, and the exercise of any
      right or remedy by either party hereto (or by its successor), whether pursuant
      to this Agreement, to any other agreement, or to law, shall not preclude or
      waive its right to exercise any or all other rights and remedies.

     

    (h) Non-waiver.
      No failure or
      neglect of either party hereto in any instance to exercise any right, power
      or
      privilege hereunder or under law shall constitute a waiver of any other right,
      power or privilege or of the same right, power or privilege in any other
      instance. All waivers by either party hereto must be contained in a written
      instrument signed by the party to be charged and, in the case of the Company,
      by
      an officer of the Company (other than Executive) or other person duly authorized
      by the Company.

     

    (i) Remedy
      for
      Breach; Attorneys’ Fees.
      The parties
      hereto agree that, in the event of breach or threatened breach of any covenants
      of Executive, the damage or imminent damage to the value and the goodwill of
      the
      Company’s business shall be inestimable, and that therefore any remedy at law or
      in damages shall be inadequate. Accordingly, the parties hereto agree that
      the
      Company shall be entitled to injunctive relief against Executive in the event
      of
      any breach or threatened breach of any of such provisions by Executive, in
      addition to any other relief (including damages) available to the Company under
      this Agreement or under law. The prevailing party in any action instituted
      pursuant to this Agreement shall be entitled to recover from the other party
      its
      reasonable attorneys’ fees and other expenses incurred in such
      action.

     

    (j) Notices.
      Any notice,
      request, consent or approval required or permitted to be given under this
      Agreement or pursuant to law shall be sufficient if in writing, and if and
      when
      sent by certified or registered mail, with postage prepaid, to Executive’s
      residence (as noted in the Company’s records), or to the Company’s principal
      office, as the case may be.

     

    (k) Assistance
      in
      Litigation.
      Executive shall,
      during and after termination of employment, upon reasonable notice, furnish
      such
      information and proper assistance to the Company as may reasonably be required
      by the Company in connection with any litigation in which it or any of its
      subsidiaries or affiliates is, or may become a party; provided, however, that
      such assistance following termination shall be furnished at mutually agreeable
      times and for mutually agreeable compensation.

     

    (l) Arbitration.
      Any controversy,
      claim or dispute arising out of or relating to this Agreement or the employment
      relationship, either during the existence of the employment relationship or
      afterwards, between the parties hereto, their assignees, their affiliates,
      their
      attorneys, or agents, shall be settled by arbitration in San Diego, California.
      Such arbitration shall be conducted in accordance with the then prevailing
      commercial arbitration rules of the American Arbitration Association (but the
      arbitration shall be in front of an arbitrator appointed by JAMS/Endispute
      (“JAMS”), with the following exceptions if in conflict: (a) one arbitrator
      shall be chosen by JAMS; (b) each party to the arbitration will pay its pro
      rata share of the expenses and fees of the arbitrator(s), together with other
      expenses of the arbitration incurred or approved by the arbitrator(s); and
      (c) arbitration may proceed in the absence of any party if written notice
      (pursuant to the JAMS’ rules and regulations) of the proceedings has been given
      to such party. The parties agree to abide by all decisions and awards rendered
      in such proceedings. Such decisions and awards rendered by the arbitrator shall
      be final and conclusive and may be entered in any court having jurisdiction
      thereof as a basis of judgment and of the issuance of execution for its
      collection. All such controversies, claims or disputes shall be settled in
      this
      manner in lieu of any action at law or equity; provided however, that nothing
      in
      this subsection shall be construed as precluding the Company from bringing
      an
      action for injunctive relief or other equitable relief or relief under the
      Confidential Information and Invention Assignment Agreement. The arbitrator
      shall not have the right to award punitive damages, consequential damages,
      lost
      profits or speculative damages to either party. The parties shall keep
      confidential the existence of the claim, controversy or disputes from third
      parties (other than the arbitrator), and the determination thereof, unless
      otherwise required by law or necessary for the business of the Company. The
      arbitrator(s) shall be required to follow applicable law. IF FOR ANY REASON
      THIS
      ARBITRATION CLAUSE BECOMES NOT APPLICABLE, THEN EACH PARTY, TO THE FULLEST
      EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
      TRIAL
      BY JURY AS TO ANY ISSUE RELATING HERETO IN ANY ACTION, PROCEEDING, OR
      COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER MATTER
      INVOLVING THE PARTIES HERETO.

     

    
      
        
        

      

      
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    IN
      WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
      the
      date set forth below.

     

      
      
        	The Small Business Company	EXECUTIVE:
	 	 
	By:                                                                  	By:                                                                 
	 	 
	Name: David Larson  	Terry Ostrowiak
	 	 
	Title: President  	Vice President
	 	 
	
                Date:                                        

              	
                Date:                                        

              

      

    

     

    
      
        
        

      

      
        6

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