Document:

Ex-10.34

 

Exhibit 10.34

FORM OF INDEMNIFICATION AGREEMENT

          AGREEMENT, executed this ___, to be effective for all purposes as of ___,
among GNC Corporation, a Delaware corporation (the “Company”), and ___(the
“Indemnitee”).

          WHEREAS, it is essential to each Company to retain and attract as directors and officers the
most capable persons available;

          WHEREAS, Indemnitee is a director or officer of each Company;

          WHEREAS, both of each Company and Indemnitee recognize the increased risk of litigation and
other claims being asserted against directors and officers of companies with registered securities
in today’s environment;

          WHEREAS, the By-Laws of each Company require that Company to indemnify and advance expenses to
its directors and officers to the full extent permitted by law and the Indemnitee has been serving
and continues to serve as a director or officer of each Company in part in reliance on such
By-Laws;

          WHEREAS, in recognition of Indemnitee’s need for substantial protection against personal
liability in order to enhance Indemnitee’s continued service to each Company in an effective
manner, the increasing difficulty in obtaining satisfactory director and officer liability
insurance coverage, and Indemnitee’s reliance on the aforesaid By-Laws, and in part to provide
Indemnitee with specific contractual assurance that the protection promised by such By-Laws will be
available to Indemnitee (regardless of, among other things, any amendment to or revocation of such
By-Laws or any change in the composition of each Company’s Board of Directors or acquisition
transaction relating to each Company), each Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the fullest extent (whether
partial or complete) permitted by law and as set forth in this Agreement, and, to the extent
insurance is maintained, for the continued coverage of Indemnitee under each Company’s directors’
and officers’ liability insurance policies;

          NOW, THEREFORE, in consideration of the premises and of Indemnitee continuing to serve each
Company directly or, at its request, another enterprise, and intending to be legally bound hereby,
the parties hereto agree as follows:

     1. Certain Definitions:

          (a) Affiliate: as to any person, any other person, directly or indirectly, controlling
or controlled by or under direct or indirect common control with such specified person. For the
purposes of this definition, “control” when used with respect to any person means the power to
direct the management and policies of such person, directly or indirectly, whether through the
ownership of voting Securities, by contract or otherwise; and the terms “controlling” and
“controlled” have meanings correlative to the foregoing.

          (b) Change of Control: the occurrence of any of the following events:

 

 

               (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)), other than one or more
Permitted Holders, is or becomes the beneficial owner (as defined in Rules 13d-3 and 13d-5
under the Exchange Act, except that for purposes of this clause (i) such person shall be
deemed to have beneficial ownership of all shares that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage of time),
directly or indirectly, of more than 35% of the total voting power of the then outstanding
Voting Securities of each Company; provided, however, that no Change of
Control shall be deemed to have occurred under this paragraph (i) if the Permitted Holders
either (a) beneficially own (as defined above), directly or indirectly, (x) in the
aggregate more than 40% of the total voting power of the then outstanding Voting
Securities of each Company and (y) a greater percentage of the total voting power of the
then outstanding Voting Securities of each Company than any other person or (b) have the
right or ability by voting power, contract or otherwise to elect or designate for election
a majority of each Company’s Board of Directors;

               (ii) during any period of two consecutive years, individuals who at the beginning of
such period constituted the Board of Directors of each Company (together with any new
members of the Board of Directors whose election by such Board of Directors or whose
nomination for election by the equityholders of each Company was approved by a vote of the
majority of the members of the Board of Directors of each Company then still in office who
were either members of the Board of Directors at the beginning of such period or whose
election or nomination for election was previously so approved including new members of
the Board of Directors designated in or provided for in an agreement regarding the merger,
consolidation or sale, transfer or other conveyance, of all or substantially all of the
assets of each Company, if such agreement was approved by a vote of such majority of
members of the Board of Directors) cease for any reason to constitute a majority of the
Board of Directors then in office;

               (iii) the adoption by the holders of Capital Stock of each Company of any plan or
proposal for the liquidation or dissolution of each Company by way of merger,
consolidation or otherwise; or

               (iv) the merger or consolidation of each Company with or into another Person or the
merger of another Person with or into each Company, or the sale of all or substantially
all the assets of each Company and its subsidiaries, taken as a whole, to another Person
(other than to a subsidiary of the Company or to one or more Permitted Holders or any
entity controlled by one or more Permitted Holders), in which, in the case of any such
merger, consolidation or sale, the securities of each Company that are outstanding
immediately prior to such transaction and that represent 100% of the aggregate Voting
Securities of the Company are changed into or exchanged for cash, securities or property;
provided, however, that no Change of Control shall be deemed to have
occurred under this paragraph (iv) if pursuant to such transaction the securities of the
Company are changed into or exchanged for, in addition to any other consideration,
securities of the surviving Person that represent immediately after such transaction, (a)
at least 30% of the aggregate voting power of the Voting Securities of the surviving
Person and (b) a greater percentage of the Voting Securities of the surviving Person than
the percentage of such Voting Securities beneficially owned by any other person (as
defined in paragraph (i) above).

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          (c) Claim: any threatened, pending or completed action, suit or proceeding, or any
inquiry or investigation, whether instituted by the Company or any other party, that Indemnitee in
good faith believes might lead to the institution of any such action, suit or proceeding, whether
civil, criminal, administrative, investigative or other.

          (d) Expenses: include attorneys’ fees and all other costs, expenses and obligations
paid or incurred in connection with investigating, defending, being a witness in or participating
in (including on appeal), or preparing to defend, be a witness in or participate in, any Claim
relating to any Indemnifiable Event.

          (e) Indemnifiable Event: any event or occurrence related to the fact that Indemnitee
is or was a director, officer, employee, agent or fiduciary of the Company, or is or was serving at
the request of the Company as a director, officer, employee, trustee, agent or fiduciary of another
corporation, partnership, joint venture, employee benefit plan, trust or other enterprise, or by
reason of anything done or not done by Indemnitee in any such capacity.

          (f) Independent Legal Counsel: an attorney or firm of attorneys, selected in
accordance with the provisions of Section 3, who shall not have otherwise performed services for
the Company or Indemnitee within the last five years (other than with respect to matters concerning
the rights of Indemnitee under this Agreement, or of other indemnitees under similar indemnity
agreements).

          (g) Permitted Holders: GNC Investors, LLC and its Affiliates and members.

          (h) Potential Change in Control: shall be deemed to have occurred if (i) the Company
enters into an agreement, the consummation of which would result in the occurrence of a Change in
Control; (ii) any person (including the Company) publicly announces an intention to take or to
consider taking actions which if consummated would constitute a Change in Control; or (iii) the
Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in
Control has occurred.

          (i) Reviewing Party: any appropriate person or body consisting of a member or members
of the Company’s Board of Directors or any other person or body appointed by the Board who is not a
party to the particular Claim for which Indemnitee is seeking indemnification, or Independent Legal
Counsel.

          (j) Voting Securities: any securities of the Company, the holders of which vote
generally in the election of directors.

     2. Basic Indemnification Arrangement. In the event Indemnitee was, is or becomes
a party to or witness or other participant in, or is threatened to be made a party to or witness or
other participant in, a Claim by reason of (or arising in part out of) an Indemnifiable Event, the
Company shall indemnify Indemnitee to the fullest extent permitted by law as soon as practicable
but in any event no later than thirty days after written demand is presented to the Company,
against any and all Expenses, judgments, fines, penalties and amounts paid in settlement (including
all interest, assessments and other charges paid or payable in connection with or in respect of
such Expenses, judgments, fines, penalties or amounts paid in settlement) of such Claim. If so
requested by Indemnitee, the Company shall advance to the fullest extent permitted by law (within
two business days of such request) any and all Expenses to Indemnitee (an “Expense Advance”).
Notwithstanding anything in this Agreement to the contrary, prior to a Change in Control Indemnitee shall not be
entitled to indemnification pursuant to this Agreement

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in connection with any Claim initiated by
Indemnitee unless the Board of Directors has authorized or consented to the initiation of such
Claim.

          (b) Notwithstanding the foregoing, (i) the obligations of the Company under Section 2(a) shall
be subject to the condition that the Reviewing Party shall not have determined (in a written
opinion, in any case in which the Independent Legal Counsel referred to in Section 2 hereof is
involved) that Indemnitee would not be permitted to be indemnified under applicable law, and (ii)
the obligation of the Company to make an Expense Advance pursuant to Section 2(a) shall be subject
to the condition that, if, when and to the extent that the Reviewing Party determines that
Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be
entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company) for all such
amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter
commences legal proceedings in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any determination made by the Reviewing
Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be
binding and Indemnitee shall not be required to reimburse the Company for any Expense Advance until
a final judicial determination is made with respect thereto (as to which all rights of appeal
therefrom have been exhausted or lapsed). If there has not been a Change in Control, the Reviewing
Party shall be selected by the Board of Directors, and if there has been such a Change in Control
(other than a Change in Control which has been approved by a majority of the Company’s Board of
Directors who were directors immediately prior to such Change in Control), the Reviewing Party
shall be the Independent Legal Counsel referred to in Section 2 hereof. If there has been no
determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee
substantively would not be permitted to be indemnified in whole or in part under applicable law,
Indemnitee shall have the right to commence litigation in any court in the State of Delaware
having subject matter jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging any such determination by the Reviewing Party or any
aspect thereof, including the legal or factual bases therefor, and the Company hereby consents to
service of process and to appear in any such proceeding. Any determination by the Reviewing Party
otherwise shall be conclusive and binding on the Company and Indemnitee.

     3. Change in Control. Each Company agrees that if there is a Change in Control of the
Company (other than a Change in Control which has been approved by a majority of the Company’s
Board of Directors who were directors immediately prior to such Change in Control) then with
respect to all matters thereafter arising concerning the rights of Indemnitee to indemnity payments
and Expense Advances under this Agreement or any other agreement or Company By-Law now or hereafter
in effect relating to Claims for Indemnifiable Events, the Company shall seek legal advice only
from Independent Legal Counsel selected by Indemnitee and approved by the Company (which approval
shall not be unreasonably withheld). Such counsel, among other things, shall render its written
opinion to the Company and Indemnitee as to whether and to what extent the Indemnitee would be
permitted to be indemnified under applicable law. The Company agrees to pay the reasonable fees of
the Independent Legal Counsel referred to above and to indemnify fully such counsel against any and
all expenses (including attorneys’ fees), claims, liabilities and damages arising out of or
relating to this Agreement or its engagement pursuant hereto.

     4. Establishment of Trust. In the event of a Potential Change in Control, the Company
shall, upon written request by Indemnitee, create a trust for the benefit of Indemnitee and from
time to time upon written request of Indemnitee shall fund such trust in an amount
sufficient to satisfy any and all Expenses reasonably anticipated at the time of each such
request

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to be incurred in connection with investigating, preparing for and defending any Claim
relating to an Indemnifiable Event, and any and all judgments, fines, penalties and settlement
amounts of any and all Claims relating to an Indemnifiable Event from time to time actually paid or
claimed, reasonably anticipated or proposed to be paid, provided that in no event shall more than
$250,000 be required to be deposited in any trust created hereunder (and no more than $1,000,000 in
the aggregate with respect to any such trusts created under this Agreement and all Indemnification
Agreements with directors and officers) in excess of amounts deposited in respect of reasonably
anticipated Expenses. The amount or amounts to be deposited in the trust pursuant to the foregoing
funding obligation shall be determined by the Reviewing Party, in any case in which the Independent
Legal Counsel referred to above is involved. The terms of the trust shall provide that upon a
Change in Control (i) the trust shall not be revoked or the principal thereof invaded, without the
written consent of the Indemnitee, (ii) the trustee shall advance, within two business days of a
request by the Indemnitee, any and all Expenses to the Indemnitee (and the Indemnitee hereby agrees
to reimburse the trust under the circumstances under which the Indemnitee would be required to
reimburse the Company under Section 2(b) of this Agreement), (iii) the trust shall continue to be
funded by the Company in accordance with the funding obligation set forth above, (iv) the trustee
shall promptly pay to Indemnitee all amounts for which Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise, and (v) all unexpended funds in such trust
shall revert to the Company upon a final determination by the Reviewing Party or a court of
competent jurisdiction, as the case may be, that Indemnitee has been fully indemnified under the
terms of this Agreement. The trustee shall be chosen by Indemnitee. Nothing in this Section 4
shall relieve the Company of any of its obligations under this Agreement.

     5. Indemnification for Additional Expenses. The Company shall indemnify Indemnitee
against any and all expenses (including attorneys’ fees and retainers) and, if requested by
Indemnitee, shall (within two business days of such request) advance such expenses to Indemnitee,
which are incurred by Indemnitee in connection with any action brought by Indemnitee for (i)
indemnification or advance payment of Expenses by the Company under this Agreement or any other
agreement or Company By-Law now or hereafter in effect relating to Claims for Indemnifiable Events
and/or (ii) recovery under any directors’ and officers’ liability insurance policies maintained by
the Company, regardless of whether Indemnitee ultimately is determined to be entitled to such
indemnification, advance expense payment or insurance recovery, as the case may be.

     6. Partial Indemnity, Etc. If Indemnitee is entitled under any provision of this
Agreement to indemnification by the Company for some or a portion of the Expenses, judgments,
fines, penalties and amounts paid in settlement of a Claim but not, however, for all of the total
amount thereof, the Company shall nevertheless indemnify Indemnitee for the portion thereof to
which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to
the extent that Indemnitee has been successful on the merits or otherwise in defense of any or all
Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter
therein, including dismissal without prejudice, Indemnitee shall be indemnified against all
Expenses incurred in connection therewith.

     7. Contribution.

          (a) Contribution Payment. To the extent the indemnification provided for under any
provision of this Agreement is determined (in the manner hereinabove provided) not to be permitted
under applicable law, the Company, in lieu of indemnifying Indemnitee, shall, to the extent
permitted by law, contribute to the amount of any and all Expenses, judgments, fines,
penalties and amounts paid in settlement (including all interest, assessments and other
charges

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paid or payable in connection with or in respect of such Expenses, judgments, fines,
penalties or amounts paid in settlement) of a Claim by reason of (or arising in part out of) an
Indemnifiable Event incurred or paid by Indemnitee for which such indemnification is not permitted.
The amount the Company contributes shall be in such proportion as is appropriate to reflect the
relative fault of Indemnitee, on the one hand, and of the Company and any and all other parties
(including officers and directors of the Company other than Indemnitee) who may be at fault
(collectively, including the Company, the “Third Parties”), on the other hand.

          (b) Relative Fault. The relative fault of the Third Parties and the Indemnitee shall
be determined (i) by reference to the relative fault of Indemnitee as determined by the court or
other governmental agency or (ii) to the extent such court or other governmental agency does not
apportion relative fault, by the Reviewing Party after giving effect to, among other things, the
relative intent, knowledge, access to information, and opportunity to prevent or correct the
relevant events, of each party, and other relevant equitable considerations. The Company and
Indemnitee agree that it would not be just and equitable if contribution were determined by pro
rata allocation or by any other method of allocation that does not take account of the equitable
considerations referred to in this Section 7(b).

     8. Burden of Proof. In connection with any determination by the Reviewing Party or
otherwise as to whether Indemnitee is entitled to be indemnified or to contribution hereunder the
burden of proof shall be on the Company to establish that Indemnitee is not so entitled.

     9. No Presumptions. For purposes of this Agreement, the termination or conclusion of
any claim, action, suit or proceeding, by judgment, order, settlement (whether with or without
court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not
create a presumption that Indemnitee did not meet any particular standard of conduct or have any
particular belief or that a court has determined that indemnification is not permitted by
applicable law. In addition, neither the failure of the Reviewing Party to have made a
determination as to whether Indemnitee has met any particular standard of conduct or had any
particular belief, nor an actual determination by the Reviewing Party that Indemnitee has not met
such standard of conduct or did not have such belief, prior to the commencement of legal
proceedings by Indemnitee to secure a judicial determination that Indemnitee should be indemnified
under applicable law shall be a defense to Indemnitee’s claim or create a presumption that
Indemnitee has not met any particular standard of conduct or did not have any particular belief.

     10. Nonexclusivity, Etc. The rights of the Indemnitee hereunder shall be in addition
to any other rights Indemnitee may have under the Company’s By-Laws or the Delaware General
Corporation Law or otherwise. To the extent that a change in the Delaware General Corporation Law
(whether by statute or judicial decision) permits greater indemnification by agreement than would
be afforded currently under the Company’s By-Laws and this Agreement, it is the intent of the
parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by
such change.

     11. Liability Insurance. To the extent the Company maintains an insurance policy or
policies providing directors’ and officers’ liability insurance, Indemnitee shall be covered by
such policy or policies, in accordance with its or their terms, to the maximum extent of the
coverage available for any Company director or officer.

     12. Period of Limitations. No legal action shall be brought and no cause of action
shall be asserted by or in the right of the Company against Indemnitee, Indemnitee’s spouse, heirs,
executors or personal or legal representatives after the expiration of two years from the date
of the

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occurrence of the events leading to such cause of action, and any claim or cause of action
of the Company shall be extinguished and deemed released unless asserted by the timely filing of a
legal action within such two-year period; provided, however, that if any shorter period of
limitations is otherwise applicable to any such cause of action such shorter period shall govern.

     13. Amendments, Etc. No supplement, modification or amendment of this Agreement shall
be binding unless executed in writing by both of the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions
hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

     14. Subrogation. In the event of payment under this Agreement, the Company shall be
subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall
execute all papers required and shall do everything that may be necessary to secure such rights,
including the execution of such documents necessary to enable the Company effectively to bring suit
to enforce such rights.

     15. No Duplication of Payments. The Company shall not be liable under this Agreement
to make any payment in connection with any Claim made against Indemnitee to the extent Indemnitee
has otherwise actually received payment (under any insurance policy, By-Law or otherwise) of the
amounts otherwise indemnifiable hereunder.

     16. Binding Effect, Etc. This Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective successors, assigns,
including any direct or indirect successor by purchase, merger, consolidation or otherwise to all
or substantially all of the business and/or assets of the Company, spouses, heirs, executors and
personal and legal representatives. This Agreement shall continue in effect regardless of whether
Indemnitee continues to serve as an officer or director of the Company or of any other enterprise
at the Company’s request.

     17. Severability. The provisions of this Agreement shall be severable in the event
that any of the provisions hereof (including any provision within a single section, paragraph or
sentence) are held by a court of competent jurisdiction to be invalid, void or otherwise
unenforceable in any respect, and the validity and enforceability of any such provision in every
other respect and of the remaining provisions hereof shall not be in any way impaired and shall
remain enforceable to the fullest extent permitted by law.

     18. Governing Law. This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of Delaware applicable to contracts made and to be performed
in such state without giving effect to the principles of conflicts of laws.

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

	 	 	 
	

	 	GNC CORPORATION
	 
	 	 
	

	 	By:                                                             
	

	 	          Name:
	

	 	          Title:
	 
	 	 
	

	 	                                                                                
	

	 	Name of Indemnitee

8exv10w3

 

EXHIBIT 10.3

SPATIALIZER AUDIO LABORATORIES, INC.

INCENTIVE STOCK OPTION AGREEMENT

               THIS INCENTIVE STOCK OPTION AGREEMENT (the “Agreement) is dated for reference as set
forth on the signature page hereof and is between SPATIALIZER AUDIO LABORATORIES, INC. (the
“Company”), and the person hereafter identified (the “Optionee”), with respect to an option (the
“Option”) to purchase that number of common shares in the capital of the Company (the “Shares”)
hereafter stated at an exercise price per share as hereafter stated.

     WHEREAS:

          A. The Company desires to grant an Option to the Optionee to purchase Shares as an incentive
for Optionee’s continued performance as a director, officer or employee of the Company or its
subsidiaries.

          B. The Board of Directors of the Company or an authorized committee thereof has authorized the
grant of an Option to the Optionee to purchase the number of Shares hereafter set forth (the
“Optioned Shares”) at the exercise price hereafter set forth (the “Exercise Price”).

               NOW THEREFORE in consideration of the premises and of the covenants and conditions hereinafter
set forth, the parties hereto agree as follows:

     1. Grant of Option

               The Company hereby grants an Option, upon the terms and conditions set forth herein, as
follows:

Optionee:

Number of Shares:

2. Effectiveness

               This grant shall be effective as of                                         . Such effective date is hereafter
referred to as the “Date of Grant.”

 

 

          3. Exercise Price

               $                    per share

          4. Exercise

               The Option to purchase up to                                         shares shall vest as follows:

               Any Option granted under the Plan may be exercised by the Optionee or, if applicable, the
legal representatives of an Optionee, giving notice to the Company specifying the number of Shares
in respect of which such Option is being exercised and accompanied by payment (by cash or certified
check payable to the Company) in an amount equal to the number of Shares in respect of which the
Option is being exercised multiplied by the Exercise Price specified in this Agreement. Upon any
such exercise of an Option the Company shall cause the transfer agent and registrar of Shares of
the Company to promptly deliver to such Optionee or the legal representative of such Optionee, as
the case may be, a Share Certificate in the name of such Optionee or the legal representative of
such Optionee, as the case may be, representing the number of Shares specified in the notice.

          5. Option Not Transferable

               The Option is not transferable or assignable except by will or by the laws of descent and
distribution.

          6. Investment Intent and Restrictions on Resale

               The Company may require, as a condition of exercising the Option, that the Optionee execute an
undertaking in a form acceptable to the Company, that the Shares are being purchased as an
investment and not with a view to distribution. The Optionee:

          a. agrees not to offer or sell or otherwise dispose of the Shares unless the Shares are
subsequently registered under the United States Securities Act of 1933, as amended, or an
exemption from registration is available;

          b. consents to the placing of a restrictive legend on any share certificates issued to
the Optionee should such be necessary in order to comply with securities laws applicable to
the Company; and

          c. acknowledges that securities laws applicable to the Company may require the Optionee
to hold any Shares issued to Optionee for a certain period prior to resale

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thereof.

          7. Termination of Options

               The Option shall terminate, to the extent not previously exercised, upon the occurrence of the
first of the following events:

         a. Five years after the Date of Grant.

         b. Thirty (30) days after the Optionee’s cessation to act as a director, officer or
employee of the Company or any of its subsidiaries for any reason (other than death);

         c. One year after the Optionee’s death; in such event, the Option may be exercised
within such one year period by the person to whom the Optionee’s rights under the Option
shall pass by the Optionee’s will or by the laws of descent and distribution to the extent
that the Optionee was entitled to exercise the Option at his death.

          8. Representations of Optionee

     The Optionee hereby confirms and represents that:

           a. Optionee is a director, officer or employee of the Company or a subsidiary of the
Company at the date hereof; and

          9. Adjustments in Shares

               The Option confers upon the Optionee the option to purchase Shares in the capital of the
Company as constituted at the date hereof. If, prior to the exercise of the Option, at any time or
from time to time, there shall be any reorganization of the capital stock of the Company, by way of
consolidation, subdivision, merger, amalgamation or otherwise, or the payment of any stock
dividends, then there shall automatically be an adjustment in either or both of the number of
Shares of the Company which may be purchased pursuant hereto or the price at which such Shares may
be purchased, by corresponding amounts, so that the Optionee’s rights hereunder shall thereafter be
as reasonably as possible equivalent to the rights originally granted to the Optionee by the
Option.

          10. Professional Advice

               The acceptance and exercise of the Option and the issuance of Optioned Shares may have
consequences under federal, provincial and state tax and securities laws which may vary depending
on the individual circumstances of the Optionee. Accordingly, the Optionee

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acknowledges that he
has been advised to consult his personal legal and tax advisor in connection with this Agreement
and his dealings with respect to the Option or the Optioned Shares.

          11. Regulatory Approvals

               The Option shall be subject to any necessary approval of and acceptance by the Vancouver Stock
Exchange and any other regulatory authority having jurisdiction over the securities of the Company.

          12. Shareholder’s Approvals

               If the approval of the shareholders of the Company to the Option or any amendment of this
Agreement shall be required by the prevailing policies of the regulatory bodies having jurisdiction
over the securities of the Company, then the Option or any amendment made to this Agreement, as the
case may be, shall be subject to the approval of the shareholders of the Company.

          13. Tax Treatment

               Optionee acknowledges that the tax treatment of this option, Shares subject to this option or
any events or transactions with respect thereto may be dependent upon various factors or events
which are not determined by this agreement. Company makes no representations with respect to and
hereby disclaims all responsibility as to such tax treatment.

          14. Withholding Tax

               If the exercise of any rights granted in this agreement or the disposition of shares following
exercise of such rights results in Optionee’s realization of income which for U.S or Canadian
income tax purposes is, in the opinion of Company, subject to withholding of tax, Optionee will pay
to Company, if and when requested by Company, an amount equal to such withholding tax (or Company
may withhold such amount from Optionee’s salary) prior to delivery of certificates evidencing the
shares purchased.

          15. Entire Agreement

               This Agreement supersedes all prior and contemporaneous oral and written statements and
representations and contains the entire agreement between the parties with respect to this Option.

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          16. Governing Law

               This Agreement shall be construed and enforced in accordance with the laws of the
State of California.

          17. Notices

               Any notice to be given hereunder shall be deemed to have been well and sufficiently given if
mailed by prepaid registered or certified mail or delivered to the parties at the addresses
specified herein or at such other address as each party may from time to time direct in writing.
Any such notice shall be deemed to have been received if mailed, seven days after the time of
mailing and if delivered, upon delivery. If normal mail service is interrupted by a mail dispute,
slowdown, strike, force majeure, or other cause, notice sent by mail shall not be deemed to be
received until actually received, and the party giving such notice shall use such other service as
may be available to ensure prompt delivery or shall deliver such notice. The addresses of the
parties are as follows:

	 	 	 
	          Company

	 	Optionee
	Spatializer Audio Laboratories, Inc.
	 	 
	2025 Gateway Place, Suite 365
	 	 
	San Jose, CA 95110
	 	 
	(408) 453-4180 (Voice)
	 	 
	(408) 437-5787 (Fax)
	 	 

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IN WITNESS WHEREOF the parties have executed these presents as of the day and year set forth
hereafter.

Dated:                                         

	 	 	 
	Company

	 	Optionee
	 
	 	 
	Spatializer Audio Laboratories, Inc.
	 	 
	 
	 	 
	By:

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00081-of-00352.parquet"}]]