Document:

AURIGA
      LABORATORIES, INC.

     

    2008
      OMNIBUS STOCK GRANT

    

    AND
      OPTION PLAN 

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    TABLE
      OF CONTENTS

    
 

    
      	 	 	
              Page

            
	 	 	 
	
              SECTION
                1. PURPOSE.

            	
              1

            
	 	 	 
	
              SECTION
                2. DEFINITIONS.

            	
              1

            
	 	 	 
	
              (a)

            	
              “Award”

            	
              1

            
	
              (b)

            	
              “Board
                of Directors”

            	
              1

            
	
              (c)

            	
              “Change
                in Control”

            	
              1

            
	
              (d)

            	
              “Code”

            	
              1

            
	
              (e)

            	
              “Committee”

            	
              1

            
	
              (f)

            	
              “Common-Law
                Employee”

            	
              1

            
	
              (g)

            	
              “Company”

            	
              2

            
	
              (h)

            	
              “Employee”

            	
              2

            
	
              (i)

            	
              “Exchange
                Act”

            	
              2

            
	
              (j)

            	
              “Exercise
                Price”

            	
              2

            
	
              (k)

            	
              “Fair
                Market Value”

            	
              2

            
	
              (l)

            	
              “Incentive
                Stock Option” or “ISO”

            	
              2

            
	
              (m)

            	
              “Nonstatutory
                Option” or “NSO”

            	
              2

            
	
              (n)

            	
              “Offeree”

            	
              2

            
	
              (o)

            	
              “Option”

            	
              3

            
	
              (p)

            	
              “Optionee”

            	
              3

            
	
              (q)

            	
              “Outside
                Director”

            	
              3

            
	
              (r)

            	
              “Participant”

            	
              3

            
	
              (s)

            	
              “Plan”

            	
              3

            
	
              (t)

            	
              “Plan
                Year”

            	
              3

            
	
              (u)

            	
              “Purchase
                Price”

            	
              3

            
	
              (v)

            	
              “Restricted
                Share”

            	
              3

            
	
              (w)

            	
              “Service”

            	
              3

            
	
              (x)

            	
              “Share”

            	
              3

            
	
              (y)

            	
              “Stock”

            	
              3

            
	
              (z)

            	
              “Stock
                Award Agreement”

            	
              3

            
	
              (aa)

            	
              “Stock
                Option Agreement”

            	
              3

            
	
              (bb)

            	
              “Stock
                Purchase Agreement”

            	
              3

            
	
              (cc)

            	
              “Subsidiary”

            	
              3

            
	
              (dd)

            	
              “Total
                and Permanent Disability”

            	
              3

            
	
              (ee)

            	
              “W-2
                Payroll”

            	
              3

            
	 	 	
               

            
	
              SECTION
                3. ADMINISTRATION.

            	
              4

            
	 	 	
               

            
	
              (a)

            	
              Committee
                Membership

            	
              4

            
	
              (b)

            	
              Committee
                Procedures

            	
              4

            
	
              (c)

            	
              Committee
                Responsibilities

            	
              4

            
	
              (d)

            	
              Committee
                Liability

            	
              4

            
	
              (e)

            	
              Financial
                Reports

            	
              4

            
	 	 	
               

            
	
              SECTION
                4. ELIGIBILITY.

            	
              4

            
	 	 	
               

            
	
              (a)

            	
              General
                Rule

            	
              4

            
	
              (b)

            	
              Ten-Percent
                Shareholders

            	
              4

            

    

     

    
      
         

      

      
        -
          i
          -

        
          

        

      

      
         

      

    

     

    
      	
              (c)

            	
              Attribution
                Rules

            	
              5

            
	
              (d)

            	
              Outstanding
                Stock

            	
              5

            
	 	 	
               

            
	
              SECTION
                5. STOCK SUBJECT TO PLAN.

            	
              5

            
	 	 	 
	
              (a)

            	
              Basic
                Limitation

            	
              5

            
	
              (b)

            	
              Additional
                Shares

            	
              5

            
	 	 	
               

            
	
              SECTION
                6. TERMS AND CONDITIONS OF AWARDS OR SALES.

            	
              5

            
	 	 	
               

            
	
              (a)

            	
              Stock
                Purchase Agreement

            	
              5

            
	
              (b)

            	
              Duration
                of Offers

            	
              5

            
	
              (c)

            	
              Purchase
                Price

            	
              5

            
	
              (d)

            	
              Payment
                for Shares

            	
              6

            
	
              (e)

            	
              Exercise
                of Awards on Termination of Service

            	
              6

            
	 	 	
               

            
	
              SECTION
                7. ADDITIONAL TERMS AND CONDITIONS OF RESTRICTED

            	
              6

            
	 	 	
               

            
	
              (a)

            	
              Form
                and Amount of Award

            	
              6

            
	
              (b)

            	
              Exercisability

            	
              6

            
	
              (c)

            	
              Effect
                of Change in Control

            	
              7

            
	
              (d)

            	
              Voting
                Rights

            	
              7

            
	 	 	
               

            
	
              SECTION
                8. TERMS AND CONDITIONS OF OPTIONS.

            	
              7

            
	 	 	
               

            
	
              (a)

            	
              Stock
                Option Agreement

            	
              7

            
	
              (b)

            	
              Number
                of Shares

            	
              7

            
	
              (c)

            	
              Exercise
                Price

            	
              7

            
	
              (d)

            	
              Exercisability

            	
              7

            
	
              (e)

            	
              Effect
                of Change in Control

            	
              7

            
	
              (f)

            	
              Term

            	
              7

            
	
              (g)

            	
              Exercise
                of Options on Termination of Service

            	
              7

            
	
              (h)

            	
              Payment
                of Option Shares

            	
              8

            
	
              (i)

            	
              Modification,
                Extension and Assumption of Options

            	
              8

            
	 	 	
               

            
	
              SECTION
                9. ADJUSTMENT OF SHARES.

            	
              8

            
	 	 	
               

            
	
              (a)

            	
              General

            	
              8

            
	
              (b)

            	
              Reorganizations

            	
              9

            
	
              (c)

            	
              Reservation
                of Rights

            	
              9

            
	 	 	
               

            
	
              SECTION
                10. WITHHOLDING TAXES.

            	
              9

            
	 	 	
               

            
	
              (a)

            	
              General

            	
              9

            
	
              (b)

            	
              Share
                Withholding

            	
              9

            
	
              (c)

            	
              Cashless
                Exercise/Pledge

            	
              9

            
	
              (d)

            	
              Other
                Forms of Payment

            	
              9

            
	 	 	 
	
              SECTION
                11. ASSIGNMENT OR TRANSFER OF AWARDS.

            	
              9

            
	 	 	
               

            
	
              (a)

            	
              General

            	
              9

            
	
              (b)

            	
              Trusts

            	
              9

            

    

     

    
      
         

      

      
        -
          ii
          -

        
          

        

      

      
         

      

    

     

    
      	
              SECTION
                12. LEGAL REQUIREMENTS.

            	
              10

            
	 	 	
               

            
	
              SECTION
                13. NO EMPLOYMENT RIGHTS.

            	
              10

            
	 	 	
               

            
	
              SECTION
                14. DURATION AND AMENDMENTS.

            	
              10

            
	 	 	
               

            
	
              (a)

            	
              Term
                of the Plan

            	
              10

            
	
              (b)

            	
              Right
                to Amend or Terminate the Plan

            	
              10

            
	
              (c)

            	
              Effect
                of Amendment or Termination

            	
              10

            

    

     

    
      
         

      

      
        -
          iii
          -

        
          

        

      

      
         

      

    

     

    

    AURIGA
      LABORATORIES, INC.

     

    2008
      OMNIBUS STOCK GRANT
      AND OPTION PLAN

     

    SECTION
      1. PURPOSE.

     

    The
      purpose of the Auriga Laboratories, Inc. 2008 Omnibus Stock Grant and Option
      Plan (the “Plan”) is to offer selected employees, directors and consultants an
      opportunity to acquire a proprietary interest in the success of the Company,
      or
      to increase such interest, to encourage such selected persons to remain in
      the
      employ of the Company, and to attract new employees with outstanding
      qualifications. The Plan seeks to achieve this purpose by providing for Awards
      in the form of Restricted Shares and Options (which may constitute Incentive
      Stock Options or Nonstatutory Stock Options) as well as the direct award or
      sale
      of Shares of the Company’s Common Stock. Awards may be granted under this Plan
      in reliance upon federal and state securities law exemptions.

     

    SECTION
      2. DEFINITIONS.

     

    (a) “Award”
      shall
      mean any award of an Option, Restricted Share or other right under the
      Plan.

     

    (b) “Board
      of Directors”
      shall
      mean the Board of Directors of the Company, as constituted from time to
      time.

     

    (c) “Change
      in Control”
      shall
      mean:

     

    (i) The
      consummation of a merger, consolidation, sale of the Company’s stock, or other
      reorganization of the Company (other than a reincorporation of the Company),
      if
      after giving effect to such merger, consolidation or other reorganization of
      the
      Company, the stockholders of the Company immediately prior to such merger,
      consolidation or other reorganization do not represent a majority interest
      of
      the holders of voting securities (on a fully diluted basis) with the ordinary
      voting power to elect directors of the surviving or resulting entity after
      such
      merger, consolidation or other reorganization; or

     

    (ii) The
      sale
      of all or substantially all of the assets of the Company to a third party who
      is
      not an affiliate of the Company.

     

    (iii) The
      term
      Change in Control shall not include: (a) a transaction the sole purpose of
      which
      is to change the state of the Company’s incorporation, or (b) the Company’s
      initial public offering.

     

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

     

    (e) “Committee”
      shall
      mean the Compensation Committee of the Board of Directors or any other committee
      which is authorized by the Board of Directors to administer the Plan under
      Section 3.

     

    (f) “Common-Law
      Employee”
      shall
      mean an individual paid from W-2 Payroll of the Company or a Subsidiary. If,
      during any period, the Company (or Subsidiary, as applicable) has not treated
      an
      individual as a Common-Law Employee and, for that reason, has not paid such
      individual in a manner which results in the issuance of a Form W-2 and withheld
      taxes with respect to him or her, then that individual shall not be an eligible
      Employee for that period, even if any person, court of law or government agency
      determines, retroactively, that that individual is or was a Common-Law Employee
      during all or any portion of that period.

     

    
      
         

      

      
        -
          1 -

        
          

        

      

      
         

      

    

     

    (g) “Company”
      shall
      mean Auriga Laboratories, Inc., a Delaware corporation.

     

    (h) “Employee”
      shall
      mean (i) any individual who is a Common-Law Employee of the Company or of a
      Subsidiary,
      (ii)
      a member
      of the Board of Directors, including (without limitation) an Outside Director,
      or an affiliate of a member of the Board of Directors,
      (iii)
      a member
      of the board of directors of a Subsidiary, or
      (iv)
      an
      independent contractor who performs services for the Company or a Subsidiary.
      Service as a member of the Board of Directors, a member of the board of
      directors of a Subsidiary or an independent contractor shall be considered
      employment for all purposes of the Plan except the second sentence of Section
      4(a).

     

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

     

    (j) “Exercise
      Price”
      shall
      mean the amount for which one Share may be purchased upon exercise of an Option,
      as specified by the Committee in the applicable Stock Option
      Agreement.

     

    (k) “Fair
      Market Value”
      means
      the market price of Shares, determined by the Committee as follows:

     

    (i)  If
      the
      Shares were traded over-the-counter on the date in question but were not traded
      on the Nasdaq Stock Market or the Nasdaq National Market System, then the Fair
      Market Value shall be equal to the last trade price or the closing bid price
      for
      the stock as quoted on such date;

     

    (ii)  If
      the
      Shares were traded over-the-counter on the date in question and were traded
      on
      the Nasdaq Stock Market or the Nasdaq National Market System, then the Fair
      Market Value shall be equal to the last-transaction price quoted for such date
      by the Nasdaq Stock Market or the Nasdaq National Market;

     

    (iii)  If
      the
      Shares were traded on a stock exchange on the date in question, then the Fair
      Market Value shall be equal to the closing price reported by the applicable
      composite transactions report for such date; and

     

    (iv)  If
      none
      of the foregoing provisions is applicable, then the Fair Market Value shall
      be
      determined by the Committee in good faith on such basis as it deems
      appropriate.

     

    In
      all
      cases, the determination of Fair Market Value by the Committee shall be
      conclusive and binding on all persons.

     

    (l) “Incentive
      Stock Option” or “ISO”
      shall
      mean an employee incentive stock option described in Code section
      422(b).

     

    (m) “Nonstatutory
      Option” or “NSO”
      shall
      mean an employee stock option that is not an ISO.

     

    (n) “Offeree”
      shall
      mean an individual to whom the Committee has offered the right to acquire Shares
      under the Plan (other than upon exercise of an Option).

     

    
      
         

      

      
        -
          2 -

        
          

        

      

      
         

      

    

     

    (o) “Option”
      shall
      mean an Incentive Stock Option or Nonstatutory Option granted under the Plan
      and
      entitling the holder to purchase Shares.

     

    (p) “Optionee”
      shall
      mean an individual or estate who holds an Option.

     

    (q) “Outside
      Director”
      shall
      mean a member of the Board who is not a Common-Law Employee of the Company
      or a
      Subsidiary.

     

    (r) “Participant”
      shall
      mean an individual or estate who holds an Award.

     

    (s) “Plan”
      shall
      mean this 2008 Omnibus Stock Grant and Option Plan of Auriga Laboratories,
      Inc.

     

    (t) “Plan
      Year”
shall
      mean any twelve (12) month period (or shorter period during the final year
      of
      this Plan) commencing November 15 during the term of this Plan.

     

    (u) “Purchase
      Price”
      shall
      mean the consideration for which one Share may be acquired under the Plan (other
      than upon exercise of an Option), as specified by the Committee.

     

    (v) “Restricted
      Share”
      shall
      mean a Share sold or granted to an eligible Employee which is nontransferable
      and subject to substantial risk of forfeiture until restrictions
      lapse.

     

    (w) “Service”
      shall
      mean service as an Employee.

     

    (x) “Share”
      shall
      mean one share of Stock, as adjusted in accordance with Section 9 (if
      applicable).

     

    (y) “Stock”
      shall
      mean the common stock of the Company.

     

    (z) “Stock
      Award Agreement”
      shall
      mean the agreement between the Company and the recipient of a Restricted Share
      which contains the terms, conditions and restrictions pertaining to such
      Restricted Share.

     

    (aa) “Stock
      Option Agreement”
      shall
      mean the agreement between the Company and an Optionee which contains the terms,
      conditions and restrictions pertaining to his or her Option.

     

    (bb) “Stock
      Purchase Agreement”
      shall
      mean the agreement between the Company and an Offeree who acquires Shares under
      the Plan which contains the terms, conditions and restrictions pertaining to
      the
      acquisition of such Shares.

     

    (cc) “Subsidiary”
      means
      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. A corporation that attains the status of a Subsidiary on a date
      after the adoption of the Plan shall be considered a Subsidiary commencing
      as of
      such date.

     

    (dd) “Total
      and Permanent Disability”
      means
      that the Optionee is unable to engage in any substantial gainful activity by
      reason of any medically determinable physical or mental impairment.

     

    
      
         

      

      
        -
          3 -

        
          

        

      

      
         

      

    

     

    (ee) “W-2
      Payroll”
      means
      whatever mechanism or procedure that the Company or a Subsidiary utilizes to
      pay
      any individual which results in the issuance of Form W-2 to the individual.
“W-2
      Payroll” does not include any mechanism or procedure which results in the
      issuance of any form other than a Form W-2 to an individual, including, but
      not
      limited to, any Form 1099 which may be issued to an independent contractor,
      an
      agency employee or a consultant. Whether a mechanism or procedure qualifies
      as a
“W-2 Payroll” shall be determined in the absolute discretion of the Company (or
      Subsidiary, as applicable), and the Company or Subsidiary determination shall
      be
      conclusive and binding on all persons.

     

    SECTION
      3. ADMINISTRATION.

     

    (a) Committee
      Membership.
      The
      Plan shall be administered by the Compensation Committee (the “Committee”)
      appointed by the Company’s Board of Directors and comprised of at least two (2)
      or more Directors (although Committee functions may be delegated to officers
      to
      the extent the awards relate to persons who are not subject to the reporting
      requirements of Section 16 of the Exchange Act). If no Committee has been
      appointed, the entire Board shall constitute the Committee.

     

    (b) Committee
      Procedures.
      The
      Board of Directors shall designate one (1) of the members of the Committee
      as
      chairperson. The Committee may hold meetings at such times and places as it
      shall determine. The acts of a majority of the Committee members present at
      meetings at which a quorum exists, or acts reduced to or approved in writing
      by
      all Committee members, shall be valid acts of the Committee.

     

    (c) Committee
      Responsibilities.
      The
      Committee has and may exercise such power and authority as may be necessary
      or
      appropriate for the Committee to carry out its functions as described in the
      Plan. The Committee has authority in its discretion to determine eligible
      Employees to whom, and the time or times at which, Awards may be granted and
      the
      number of Shares subject to each Award. Subject to the express provisions of
      the
      respective Award agreements (which need not be identical) and to make all other
      determinations necessary or advisable for Plan administration, the Committee
      has
      authority to prescribe, amend, and rescind rules and regulations relating to
      the
      Plan. All interpretations, determinations, and actions by the Committee will
      be
      final, conclusive, and binding upon all persons.

     

    (d) Committee
      Liability.
      No
      member of the Board or the Committee will be liable for any action or
      determination made in good faith by the Committee with respect to the Plan
      or
      any Award made under the Plan.

     

    (e) Financial
      Reports.
      To the
      extent required by applicable law, and not less often than annually, the Company
      shall furnish to Offerees, Optionees and Shareholders who have received Stock
      under the Plan its financial statements, including a balance sheet, regarding
      the Company’s financial condition and results of operations, unless such
      Offerees, Optionees or Shareholders have duties with the Company that assure
      them access to equivalent information. Such financial statements need not be
      audited.

     

    SECTION
      4. ELIGIBILITY.

     

    (a) General
      Rule.
      Only
      Employees shall be eligible for designation as Participants by the Committee.
      In
      addition, only individuals who are employed as Common-Law Employees by the
      Company or a Subsidiary shall be eligible for the grant of ISOs.

     

    (b) Ten-Percent
      Shareholders.
      An
      Employee who owns more than ten percent (10%) of the total combined voting
      power
      of all classes of outstanding stock of the Company or any of its Subsidiaries
      shall not be eligible for designation as an Offeree or Optionee unless (i)
      the
      Exercise Price for an ISO (and a NSO to the extent required by applicable law)
      is at least one hundred ten percent (110%) of the Fair Market Value of a Share
      on the date of grant, (ii) if required by applicable law, the Purchase Price
      of
      Shares is at least one hundred percent (100%) of the Fair Market Value of a
      Share on the date of grant, and (iii) in the case of an ISO, such ISO by its
      terms is not exercisable after the expiration of ten (10) years from the date
      of
      grant.

     

    
      
         

      

      
        -
          4 -

        
          

        

      

      
         

      

    

     

    (c) Attribution
      Rules.
      For
      purposes of Subsection (b) above, in determining stock ownership, an Employee
      shall be deemed to own the stock owned, directly or indirectly, by or for his
      brothers, sisters, spouse, ancestors and lineal descendants. Stock owned,
      directly or indirectly, by or for a corporation, partnership, estate or trust
      shall be deemed to be owned proportionately by or for its shareholders, partners
      or beneficiaries. Stock with respect to which such Employee holds an Option
      shall not be counted.

     

    (d) Outstanding
      Stock.
      For
      purposes of Subsection (b) above, “outstanding stock” shall include all stock
      actually issued and outstanding immediately after the grant. “Outstanding Stock”
shall not include shares authorized for issuance under outstanding Options
      held
      by the Employee or by any other person.

     

    SECTION
      5. STOCK
      SUBJECT TO PLAN.

     

    (a) Basic
      Limitation.
      Shares
      offered under the Plan shall be authorized but unissued Shares. Subject to
      Sections 5(b) and 9 of the Plan, the aggregate number of Shares which may be
      issued or transferred as common stock pursuant to an Award under the Plan shall
      not exceed Ten Million (10,000,000) shares of Authorized Common Stock of the
      Company.

     

    In
      any
      event, the number of Shares which are subject to Awards or other rights
      outstanding at any time under the Plan shall not exceed the number of Shares
      which then remain available for issuance under the Plan. The Company, during
      the
      term of the Plan, shall at all times reserve and keep available sufficient
      Shares to satisfy the requirements of the Plan.

    

    (b) Additional
      Shares.
      In the
      event that any outstanding Option or other right for any reason expires or
      is
      canceled or otherwise terminated, the Shares allocable to the unexercised
      portion of such Option or other right shall again be available for the purposes
      of the Plan. If a Restricted Share is forfeited before any dividends have been
      paid with respect to such Restricted Share, then such Restricted Share shall
      again become available for award under the Plan.

     

    SECTION
      6. TERMS
      AND CONDITIONS OF AWARDS OR SALES.

     

    (a) Stock
      Purchase Agreement.
      Each
      award or sale of Shares under the Plan (other than upon exercise of an Option)
      shall be evidenced by a Stock Purchase Agreement between the Offeree and the
      Company. Such award or sale shall be subject to all applicable terms and
      conditions of the Plan and may be subject to any other terms and conditions
      which are not inconsistent with the Plan and which the Committee deems
      appropriate for inclusion in a Stock Purchase Agreement. The provisions of
      the
      various Stock Purchase Agreements entered into under the Plan need not be
      identical.

     

    (b) Duration
      of Offers.
      Any
      right to acquire Shares under the Plan (other than an Option) shall
      automatically expire if not exercised by the Offeree within thirty (30) days
      after the grant if such right was communicated to the Offeree by the
      Committee.

     

    (c) Purchase
      Price.
      Unless
      otherwise permitted by applicable law, the Purchase Price of Shares to be
      offered under the Plan shall not be less than eighty-five percent (85%) of
      the
      Fair Market Value of a Share on the date of grant (100% for 10% shareholders),
      except as otherwise provided in Section 4(b). Subject to the preceding sentence,
      the Purchase Price shall be determined by the Committee in its sole discretion.
      The Purchase Price shall be payable in a form described in Subsection (d)
      below.

     

    
      
         

      

      
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          5 -

        
          

        

      

      
         

      

    

     

    (d) Payment
      for Shares.
      The
      entire Purchase Price of Shares issued under the Plan shall be payable in lawful
      money of the United States of America at the time when such Shares are
      purchased, except as provided below:

     

    (i) Surrender
      of Stock.
      To the
      extent that a Stock Option Agreement so provides, payment may be made all or
      in
      part with Shares which have already been owned by the Optionee or Optionee’s
      representative for any time period specified by the Committee and which are
      surrendered to the Company in good form for transfer. Such shares shall be
      valued at their Fair Market Value on the date when the new Shares are purchased
      under the Plan.

     

    (ii) Promissory
      Notes.
      To the
      extent that a Stock Option Agreement or Stock Purchase Agreement so provides,
      and as permitted by applicable law, payment may be made all or in part with
      a
      full recourse promissory note executed by the Optionee or Offeree. The interest
      rate and other terms and conditions of such note shall be determined by the
      Committee. The Committee may require that the Optionee or Offeree pledge his
      or
      her Shares to the Company for the purpose of securing the payment of such note.
      In no event shall the stock certificate(s) representing such Shares be released
      to the Optionee or Offeree until such note is paid in full.

     

    (iii) Cashless
      Exercise.
      To the
      extent that a Stock Option Agreement so provides and a public market for the
      Shares exists, payment may be made all or in part by delivery (on a form
      prescribed by the Committee) of an irrevocable direction to a securities broker
      to sell shares and to deliver all or part of the sale proceeds to the Company
      in
      payment of the aggregate Exercise Price.

     

    (iv) Other
      Forms of Payment.
      To the
      extent provided in the Stock Option Agreement, payment may be made in any other
      form that is consistent with applicable laws, regulations and
      rules.

     

    (e) Exercise
      of Awards on Termination of Service.
      Each
      Stock Award Agreement shall set forth the extent to which the recipient shall
      have the right to exercise the Award following termination of the recipient’s
      Service with the Company and its Subsidiaries. Such provisions shall be
      determined in the sole discretion of the Committee, need not be uniform among
      all the Awards issued pursuant to the Plan, and may reflect distinctions based
      on the reasons for termination of employment.

     

    SECTION
      7. ADDITIONAL
      TERMS AND CONDITIONS OF RESTRICTED
      SHARES. 

    

    (a) Form
      and Amount of Award.
      Each
      Stock Award Agreement shall specify the number of Shares that are subject to
      the
      Award. Restricted Shares may be awarded in combination with NSOs and such an
      Award may provide that the Restricted Shares will be forfeited in the event
      that
      the related NSOs are exercised.

    

    (b) Exercisability.
      Each
      Stock Award Agreement shall specify the conditions upon which Restricted Shares
      shall become vested, in full or in installments. To the extent required by
      applicable law, each Stock Award shall become exercisable no less rapidly than
      the rate of 20% per year for each of the first five (5) years from the date
      of
      grant. Subject to the preceding sentence, the exercisability of any Stock Award
      shall be determined by the Committee in its sole discretion.

     

    
      
         

      

      
        -
          6 -

        
          

        

      

      
         

      

    

     

    (c) Effect
      of Change in Control.
      The
      Committee may determine at the time of making an Award or thereafter, that
      such
      Award shall become fully vested, in whole or in part, in the event that a Change
      in Control occurs with respect to the Company.

     

    (d) Voting
      Rights.
      Holders
      of Restricted Shares awarded under the Plan shall have the same voting, dividend
      and other rights as the Company’s other stockholders. A Stock Award Agreement,
      however, may require that the holders invested any cash dividends received
      in
      additional Restricted Shares. Such additional Restricted Shares shall be subject
      to the same conditions and restrictions as the Award with respect to which
      the
      dividends were paid. Such additional Restricted Shares shall not reduce the
      number of Shares available under Section 5.

     

    SECTION
      8. TERMS
      AND CONDITIONS OF OPTIONS.

     

    (a) Stock
      Option Agreement.
      Each
      grant of an Option under the Plan shall be evidenced by a Stock Option Agreement
      between the Optionee and the Company. Such Option shall be subject to all
      applicable terms and conditions of the Plan and may be subject to any other
      terms and conditions which are not inconsistent with the Plan and which the
      Committee deems appropriate for inclusion in a Stock Option Agreement. The
      provisions of the various Stock Option Agreements entered into under the Plan
      need not be identical.

     

    (b) Number
      of Shares.
      Each
      Stock Option Agreement shall specify the number of Shares that are subject
      to
      the Option and shall provide for the adjustment of such number in accordance
      with Section 9. The Stock Option Agreement shall also specify whether the Option
      is an ISO or a Nonstatutory Option.

     

    (c) Exercise
      Price.
      Each
      Stock Option Agreement shall specify the Exercise Price. The Exercise Price
      of
      an ISO shall not be less than one hundred percent (100%) of the Fair Market
      Value of a Share on the date of grant, except as otherwise provided in Section
      4(b). Except as otherwise provided in Section 4(b), the Exercise Price of a
      Nonstatutory Option is not subject to any minimum price and the exercise price
      does not have to be determined based on the Fair Market Value of a Share.
      Subject to the preceding two sentences, the Exercise Price under any Option
      shall be determined by the Committee in its sole discretion. The Exercise Price
      shall be payable in a form described in Subsection (h) below.

     

    (d) Exercisability.
      Each
      Stock Option Agreement shall specify the date when all or any installment of
      the
      Option is to become exercisable. To the extent required by applicable law,
      an
      Option shall become exercisable no less rapidly than the rate of twenty percent
      (20%) per year for each of the first five (5) years from the date of grant.
      Subject to the preceding sentence, the exercisability of any Option shall be
      determined by the Committee in its sole discretion.

     

    (e) Effect
      of Change in Control.
      The
      Committee may determine, at the time of granting an Option or thereafter, that
      such Option shall become fully exercisable as to all Shares subject to such
      Option in the event that a Change in Control occurs with respect to the
      Company.

     

    (f) Term.
      The
      Stock Option Agreement shall specify the term of the Option. The term shall
      not
      exceed ten (10) years from the date of grant. Subject to the preceding sentence,
      the Committee at its sole discretion shall determine when an Option is to
      expire.

     

    (g) Exercise
      of Options on Termination of Service.
      Each
      Option shall set forth the extent to which the Optionee shall have the right
      to
      exercise the Option following termination of the Optionee’s Service with the
      Company and its Subsidiaries. Such provisions shall be determined in the sole
      discretion of the Committee, need not be uniform among all Options issued
      pursuant to the Plan, and may reflect distinctions based on the reasons for
      termination of employment. Notwithstanding the foregoing, to the extent required
      by applicable law, each Option shall provide that the Optionee shall have the
      right to exercise the vested portion of any Option held at termination for
      at
      least sixty (60) days following termination of Service with the Company for
      any
      reason, and that the Optionee shall have the right to exercise the Option for
      at
      least six (6) months if the Optionee’s Service terminates due to death or
      Disability.

     

    
      
         

      

      
        -
          7 -

        
          

        

      

      
         

      

    

     

    (h) Payment
      of Option Shares.
      The
      entire Exercise Price of Shares issued under the Plan shall be payable in lawful
      money of the United States of America at the time when such Shares are
      purchased, except as provided below:

     

    (i) Surrender
      of Stock.
      To the
      extent that a Stock Option Agreement so provides, payment may be made all or
      in
      part with Shares which have already been owned by the Optionee or Optionee’s
      representative for any time period specified by the Committee and which are
      surrendered to the Company in good form for transfer. Such shares shall be
      valued at their Fair Market Value on the date when the new Shares are purchased
      under the Plan.

     

    (ii) Promissory
      Notes.
      To the
      extent that a Stock Option Agreement or Stock Purchase Agreement so provides,
      and to the extent allowable to applicable law, payment may be made all or in
      part with a full recourse promissory note executed by the Optionee or Offeree.
      The interest rate and other terms and conditions of such note shall be
      determined by the Committee. The Committee may require that the Optionee or
      Offeree pledge his or her Shares to the Company for the purpose of securing
      the
      payment of such note. In no event shall the stock certificate(s) representing
      such Shares be released to the Optionee or Offeree until such note is paid
      in
      full.

     

    (iii) Cashless
      Exercise.
      To the
      extent that a Stock Option Agreement so provides and a public market for the
      Shares exists, payment may be made all or in part by delivery (on a form
      prescribed by the Committee) of an irrevocable direction to a securities broker
      to sell shares and to deliver all or part of the sale proceeds to the Company
      in
      payment of the aggregate Exercise Price.

     

    (iv) Other
      Forms of Payment.
      To the
      extent provided in the Stock Option Agreement, payment may be made in any other
      form that is consistent with applicable laws, regulations and
      rules.

     

    (i) Modification,
      Extension and Assumption of Options.
      Within
      the limitations of the Plan, the Committee may modify, extend or assume
      outstanding Options or may accept the cancellation of outstanding Options
      (whether granted by the Company or another issuer) in return for the grant
      of
      new Options for the same or a different number of Shares and at the same or
      a
      different Exercise Price or for other consideration.

     

    SECTION
      9. ADJUSTMENT
      OF SHARES.

     

    (a) General.
      In the
      event of a subdivision of the outstanding Stock, a declaration of a dividend
      payable in Shares, a combination or consolidation of the outstanding Stock
      into
      a lesser number of Shares, a recapitalization, a reclassification or a similar
      occurrence, the Committee shall make appropriate adjustments, subject to the
      limitations set forth in Section 9(c), in one or more of (i) the number of
      Shares available for future Awards under Section 5, (ii) the number of Shares
      covered by each outstanding Option or Purchase Agreement or (iii) the Exercise
      Price or Purchase Price under each outstanding Option or Stock Purchase
      Agreement.

     

    
      
         

      

      
        -
          8 -

        
          

        

      

      
         

      

    

     

    (b) Reorganizations.
      In the
      event that the Company is a party to a merger or reorganization, outstanding
      Options shall be subject to the agreement of merger or reorganization, provided
      however, that the limitations set forth in Section 9(c) shall
      apply.

     

    (c) Reservation
      of Rights.
      Except
      as provided in this Section 9, an Optionee or an Offeree shall have no rights
      by
      reason of (i) any subdivision or consolidation of shares of stock of any class,
      (ii) the payment of any dividend or (iii) any other increase or decrease in
      the number of shares of stock of any class. Any issue by the Company of shares
      of stock of any class, or securities convertible into shares of stock of any
      class, shall not affect, and no adjustment by reason thereof shall be made
      with
      respect to, the number, Exercise Price or Purchase Agreement of Shares subject
      to an Option or Stock Purchase Agreement. The grant of an Award pursuant to
      the
      Plan shall not affect in any way the right or power of the Company to make
      adjustments, reclassifications, reorganizations or changes of its capital or
      business structure, to merge or consolidate or to dissolve, liquidate, sell
      or
      transfer all or any part of its business or assets.

     

    SECTION
      10. WITHHOLDING
      TAXES.

     

    (a) General.
      To the
      extent required by applicable federal, state, local or foreign law, a
      Participant or his or her successor shall make arrangements satisfactory to
      the
      Committee for the satisfaction of any withholding tax obligations that arise
      in
      connection with the Plan. The Company shall not be required to issue any Shares
      or make any cash payment under the Plan until such obligations are
      satisfied.

     

    (b) Share
      Withholding.
      The
      Committee may permit a Participant to satisfy all or part of his or her
      withholding or income tax obligations by having the Company withhold all or
      a
      portion of any Shares that otherwise would be issued to him or her or by
      surrendering all or a portion of any Shares that he or she previously acquired.
      Such Shares shall be valued at their Fair Market Value on the date when taxes
      otherwise would be withheld in cash. Any payment of taxes by assigning Shares
      to
      the Company may be subject to restrictions, including any restrictions required
      by rules of any federal or state regulatory body or other
      authority.

     

    (c) Cashless
      Exercise/Pledge.
      The
      Committee may provide that if Company Shares are publicly traded at the time
      of
      exercise, arrangements may be made to meet the Optionee’s withholding obligation
      by cashless exercise or pledge.

     

    (d) Other
      Forms of Payment.
      The
      Committee may permit such other means of tax withholding as it deems
      appropriate.

     

    SECTION
      11. ASSIGNMENT
      OR TRANSFER OF AWARDS.

     

    (a) General.
      An
      Award granted under the Plan shall not be anticipated, assigned, attached,
      garnished, optioned, transferred or made subject to any creditor’s process,
      whether voluntarily, involuntarily or by operation of law, except as approved
      by
      the Committee. Notwithstanding the foregoing, ISOs may not be transferable.
      Also
      notwithstanding the foregoing, Offerees and Optionees may not transfer their
      rights hereunder except by will, beneficiary designation or the laws of descent
      and distribution.

     

    (b) Trusts.
      Neither
      this Section 11 nor any other provision of the Plan shall preclude a Participant
      from transferring or assigning Restricted Shares to (a) the trustee of a trust
      that is revocable by such Participant alone, both at the time of the transfer
      or
      assignment and at all times thereafter prior to such Participant’s death, or (b)
      the trustee of any other trust to the extent approved by the Committee in
      writing. A transfer or assignment of Restricted Shares from such trustee to
      any
      other person than such Participant shall be permitted only to the extent
      approved in advance by the Committee in writing, and Restricted Shares held
      by
      such trustee shall be subject to all the conditions and restrictions set forth
      in the Plan and in the applicable Stock Award Agreement, as if such trustee
      were
      a party to such Agreement.

     

    
      
         

      

      
        -
          9 -

        
          

        

      

      
         

      

    

     

    SECTION
      12. LEGAL
      REQUIREMENTS.

     

    Shares
      shall not be issued under the Plan unless the issuance and delivery of such
      Shares complies with (or is exempt from) all applicable requirements of law,
      including (without limitation) the Securities Act of 1933, as amended, the
      rules
      and regulations promulgated thereunder, state securities laws and regulations,
      and the regulations of any stock exchange on which the Company’s securities may
      then be listed.

     

    SECTION
      13. NO
      EMPLOYMENT RIGHTS.

     

    No
      provision of the Plan, nor any right or Option granted under the Plan, shall
      be
      construed to give any person any right to become, to be treated as, or to remain
      an Employee. The Company and its Subsidiaries reserve the right to terminate
      any
      person’s Service at any time and for any reason.

     

    SECTION
      14. DURATION
      AND AMENDMENTS.

     

    (a) Term
      of the Plan.
      The
      Plan, as set forth herein, shall become effective on the date of its adoption
      by
      the Board of Directors, subject to the approval of the Company’s shareholders.
      In the event that the shareholders fail to approve the Plan within twelve (12)
      months after its adoption by the Board of Directors, any grants already made
      shall be null and void, and no additional grants shall be made after such date.
      The Plan shall terminate automatically ten (10) years after its adoption by
      the
      Board of Directors and may be terminated on any earlier date pursuant to
      Subsection (b) below.

     

    (b) Right
      to Amend or Terminate the Plan.
      The
      Board of Directors may amend the Plan at any time and from time to time. Rights
      and obligations under any right or Option granted before amendment of the Plan
      shall not be materially altered, or impaired adversely, by such amendment,
      except with consent of the person to whom the right or Option was granted.
      An
      amendment of the Plan shall be subject to the approval of the Company’s
      shareholders only to the extent required by applicable laws, regulations or
      rules including the rules of any applicable exchange.

     

    (c) Effect
      of Amendment or Termination.
      No
      Shares shall be issued or sold under the Plan after the termination thereof,
      except upon exercise of an Option granted prior to such termination. The
      termination of the Plan, or any amendment thereof, shall not affect any Shares
      previously issued or any Option previously granted under the Plan.

     

    [END
      OF PLAN]

     

    
      
         

      

      
        -
          10 -THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
      SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED
      AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS
      OF
      FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION
      OF
      COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER
      FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.

     

    AURIGA
      LABORATORIES, INC.

    2008
      Omnibus Stock Grant and Option Plan

     

    INCENTIVE
      STOCK OPTION AGREEMENT

     

    Auriga
      Laboratories, Inc. (the “Company”), hereby grants an Option to purchase shares
      of its common stock (“Shares”) to the Optionee named below. The terms and
      conditions of the Option are set forth in this cover sheet, in the attachment
      and in the Company’s 2008 Omnibus Stock Grant and Option Plan (the
“Plan”).

     

    Date
      of
      Grant: ___________________________

     

    Name
      of
      Optionee: ___________________________

     

    Optionee’s
      Social Security Number: ___________________________

     

    Number
      of
      Shares Covered by Option: ___________________________

     

    Exercise
      Price per Share: $___________________________

    [must
      be
      at least 100% fair market value on Date of Grant]

     

    Vesting
      Start Date: ___________________________

     

    
      	o	
              Check
                here if Optionee is a 10% owner (so that exercise price must be 110%
                of
                fair market value).

            

    

     

    By
      signing this cover sheet, you agree to all of the terms and conditions described
      in the attached Agreement and in the Plan, a copy of which is also
      attached.

     

    

      
        	
                Optionee:

              	 	 
	 	
                (Signature)

              	 
	
                Company:

              	 	 
	 	
                (Signature)

              	 
	 	 	 
	
                
                  Title: 

                

              	
                 

              	 

      

    

    
      
        
        

      

      
        -
          1
          -

        
          

        

      

      
        
        

      

    

    

    THE
      SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED OR QUALIFIED UNDER THE
      SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE, AND MAY BE OFFERED
      AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO THE RELEVANT PROVISIONS
      OF
      FEDERAL AND STATE SECURITIES LAWS OR IF THE COMPANY IS PROVIDED AN OPINION
      OF
      COUNSEL SATISFACTORY TO THE COMPANY THAT REGISTRATION AND QUALIFICATION UNDER
      FEDERAL AND STATE SECURITIES LAWS IS NOT REQUIRED.

     

    AURIGA
      LABORATORIES, INC.

    2008
      Omnibus Stock Grant and Option Plan

     

    INCENTIVE
      STOCK OPTION AGREEMENT

     

    
      	
              Incentive
                Stock Option

            	
              This
                Option is intended to be an incentive stock option under section
                422 of
                the Internal Revenue Code and will be interpreted
                accordingly.

            
	 	 
	
              Vesting

            	
              No
                Shares will vest until you have performed _________ (____) months
                of
                Service from the commencement of your employment with the Company.
                Your
                Option shall vest as to ________ of the Shares on the date _______
                (____)
                months from the Vesting Start Date as shown on the cover sheet.
                Thereafter, Shares shall vest at the rate of _______ of the Shares
                at the
                end of each full month thereafter. After you have completed _________
                (____) months of Service, the number of Shares which vest under this
                Option at the Exercise Price shall be equal to the product of the
                number
                of full months of your continuous employment with the Company (“Service”)
                (including any approved leaves of absence) from the Vesting Start
                Date
                times the number of Shares covered by this Option times ________.
                The
                resulting number of Shares will be rounded to the nearest whole number.
                No
                additional Shares will vest after your Service has terminated for
                any
                reason.

               

              You
                should note that you may exercise the Option prior to vesting. In
                that
                case, the Company has a right to repurchase the unvested shares at
                the
                original exercise price if you terminate employment before vesting
                in all
                shares you purchased. Also, if you exercise before vesting, you should
                consider making an 83(b) election. Please see the attached Tax Summary.
                The
                83(b) election must be filed within thirty (30) days of the date
                you
                exercise.

            
	 	 
	
              Term

            	
              Your
                Option will expire in any event at the close of business at Company
                headquarters on the day before the tenth anniversary of the Date
                of Grant,
                as shown on the cover sheet. (It will expire earlier if your Service
                terminates, as described below.)

            

    

     

    
      
        
        

      

      
        -
          2
          -

        
          

        

      

      
        
        

      

    

     

    
      	
              Regular
                Termination

            	
              If
                your Service terminates for any reason except death, Disability or
                for
                “Cause,” your Option will expire at the close of business at Company
                headquarters on the 30th day after your termination date. During
                that
                30-day period, you may exercise that portion of your Option that
                was
                vested on your termination date.

            
	 	 
	
              Death

            	
              If
                you die while in Service with the Company, your Option will expire
                at the
                close of business at Company headquarters on the date six (6) months
                after
                the date of death. During that six-month period, your estate or heirs
                may
                exercise that portion of your Option that was vested on the date
                of
                death.

            
	 	 
	
              Disability

            	
              If
                your Service terminates because of your Disability, your Option will
                expire at the close of business at Company headquarters on the date
                six
                (6) months after your termination date. (However, if your Disability
                is
                not expected to result in death or to last for a continuous period
                of at
                least twelve (12) months, your Option will be eligible for ISO tax
                treatment only if it is exercised within three (3) months following
                the
                termination of your Service.) During that six-month period, you may
                exercise that portion of your Option that was vested on the date
                of your
                Disability.

               

              “Disability”
                means that you are unable to engage in any substantial gainful activity
                by
                reason of any medically determinable physical or mental
                impairment.

            
	 	 
	
              Leaves
                of Absence

            	
              For
                purposes of this Option, your Service does not terminate when you
                go on a
                bona
                fide
                leave of absence that was approved by the Company in writing, if
                the terms
                of the leave provide for continued service crediting, or when continued
                service crediting is required by applicable law. However, your Service
                will be treated as terminating thirty (30) days after you went on
                leave,
                unless your right to return to active work is guaranteed by law or
                by a
                contract. Your Service terminates in any event when the approved
                leave
                ends unless you immediately return to active work. The Company determines
                which leaves count for this purpose, and when your Service terminates
                for
                all purposes under the Plan. The Company also determines the extent
                to
                which you may exercise the vested portion of your Option during a
                leave of
                absence.

            
	 	 
	
              Notice
                of Exercise

            	
              When
                you wish to exercise this Option, you must execute Exhibit
                A
                (and, if exercise is prior to vesting, you must also execute Exhibits
                B and D).
                Your exercise will be effective when it is received by the Company.
                If
                someone else wants to exercise this Option after your death, that
                person
                must prove to the Company’s satisfaction that he or she is entitled to do
                so.

            
	 	 
	
              Form
                of Payment

            	
              When
                you submit Exhibit
                A,
                you must include payment of the Exercise Price for the Shares you
                are
                purchasing. Payment may be made in one (or a combination) of the
                following
                forms at the discretion of the
                committee:

            

    

     

    
      
        
        

      

      
        -
          3
          -

        
          

        

      

      
        
        

      

    

     

    
      	 	
              · Your
                personal check, a cashier’s check or a money order.

              · Shares
                which you have owned for six (6) months and which are surrendered
                to the
                Company. The value of the Shares, determined as of the effective
                date of
                the Option exercise, will be applied to the Exercise Price.

              · To
                the extent that a public market for the Shares exists as determined
                by the
                Company, by delivery (on a form prescribed by the Committee) of an
                irrevocable direction to a securities broker to sell Shares and to
                deliver
                all or part of the sale proceeds to the Company in payment of the
                aggregate Exercise Price.

              · Any
                other form of legal consideration approved by the
                Committee.

            
	 	 
	
              Withholding
                Taxes

            	
              You
                will not be allowed to exercise this Option unless you make acceptable
                arrangements to pay any withholding or other taxes that may be due
                as a
                result of the Option exercise or the sale of Shares acquired upon
                exercise
                of this Option.

            
	 	 
	
              Restrictions
                on Resale 

            	
              By
                signing this Agreement, you agree not to exercise this Option or
                sell any
                Shares acquired upon exercise of this Option at a time when applicable
                laws, regulations or Company or underwriter trading policies prohibit
                exercise or sale. In particular, the Company shall have the right
                to
                designate one or more periods of time, each of which shall not exceed
                one
                hundred eighty (180) days in length, during which this Option shall
                not be
                exercisable if the Company determines (in its sole discretion) that
                such
                limitation on exercise could in any way facilitate a lessening of
                any
                restriction on transfer pursuant to the Securities Act or any state
                securities laws with respect to any issuance of securities by the
                Company,
                facilitate the registration or qualification of any securities by
                the
                Company under the Securities Act or any state securities laws, or
                facilitate the perfection of any exemption from the registration
                or
                qualification requirements of the Securities Act or any applicable
                state
                securities laws for the issuance or transfer of any securities. Such
                limitation on exercise shall not alter the vesting schedule set forth
                in
                this Agreement other than to limit the periods during which this
                Option
                shall be exercisable.

               

              Furthermore,
                in respect of any underwritten public offering by the Company, you
                agree
                that you will not sell or otherwise transfer or dispose of any Shares
                covered by this Option during a reasonable and customary period of
                time as
                agreed to by the Company and the underwriters, not to exceed the
                greater
                of (a) one hundred eighty (180) days following the effective date
                of the
                registration statement of the Company filed under the Securities
                Act in
                respect of such offering and (b) such other period of time as agreed
                to by
                holders of a majority of the then outstanding Shares. By signing
                this
                Agreement you agree to execute and deliver such other agreements
                as may be
                reasonably requested by the Company or the underwriter which are
                consistent with the foregoing or which are necessary to give further
                effect thereto. The Company may impose stop-transfer instructions
                with
                respect to the Shares subject to the foregoing restriction until
                the end
                of such period.

            

    

     

    
      
        
        

      

      
        -
          4
          -

        
          

        

      

      
        
        

      

    

     

    
      	 	
              If
                the sale of Shares under the Plan is not registered under the Securities
                Act of 1933, as amended (the “Securities Act”), but an exemption is
                available which requires an investment or other representation, you
                shall
                represent and agree at the time of exercise that the Shares being
                acquired
                upon exercise of this Option are being acquired for investment, and
                not
                with a view to the sale or distribution thereof, and shall make such
                other
                representations as are deemed necessary or appropriate by the Company
                and
                its counsel. 

            
	 	 
	
              The
                Company’s Right of First Refusal

            	
              In
                the event that you propose to sell, pledge or otherwise transfer
                to a
                third party any Shares acquired under this Agreement, or any interest
                in
                such Shares, the Company shall have the “Right of First Refusal” with
                respect to all (and not less than all) of such Shares. If you desire
                to
                transfer Shares acquired under this Agreement, you must give a written
                “Transfer Notice” to the Company describing fully the proposed transfer,
                including the number of Shares proposed to be transferred, the proposed
                transfer price and the name and address of the proposed transferee.
                The
                Transfer Notice shall be signed both by you and by the proposed transferee
                and must constitute a binding commitment of both parties to the transfer
                of the Shares.

               

              The
                Company and its assignees shall have the right to purchase all, and
                not
                less than all, of the Shares on the terms described in the Transfer
                Notice
                (subject, however, to any change in such terms permitted in the next
                paragraph) by delivery of a Notice of Exercise of the Right of First
                Refusal within thirty(30) days after the date when the Transfer Notice
                was
                received by the Company. The Company’s rights under this Subsection shall
                be freely assignable, in whole or in part.

               

              If
                the Company fails to exercise its Right of First Refusal within thirty
                (30) days after the date when it received the Transfer Notice, you
                may,
                not later than sixty (60) days following receipt of the Transfer
                Notice by
                the Company, conclude a transfer of the Shares subject to the Transfer
                Notice on the terms and conditions described in the Transfer Notice.
                Any
                proposed transfer on terms and conditions different from those described
                in the Transfer Notice, as well as any subsequent proposed transfer
                by
                you, shall again be subject to the Right of First Refusal and shall
                require compliance with the procedure described in the paragraph
                above. If
                the Company exercises its Right of First Refusal, you and the Company
                (or
                its assignees) shall consummate the sale of the Shares on the terms
                set
                forth in the Transfer Notice.

               

              The
                Company’s Right of First Refusal shall inure to the benefit of its
                successors and assigns and shall be binding upon any transferee of
                the
                Shares.

            

    

     

    
      
        
        

      

      
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              Right
                of Repurchase

            	
              Following
                termination of your Service for any reason, the Company shall have
                the
                right to purchase all of those vested Shares that you have or will
                acquire
                under this Option (unvested Shares which have been exercised are
                subject
                to a Repurchase Option set forth in Exhibit
                A).
                If the Company fails to provide you with written notice of its intention
                to purchase such Shares before or within thirty (30) days of the
                date the
                Company receives written notice from you of your termination of Service,
                the Company’s right to purchase such Shares shall terminate. If the
                Company exercises its right to purchase such Shares, the Company
                will
                consummate the purchase of such Shares within sixty (60) days of
                the date
                of its written notice to you. The purchase price for any Shares
                repurchased shall be the higher of the fair market value of the Shares
                on
                the date of purchase or the aggregate Exercise Price for such Shares
                and
                shall be paid in cash. The Company’s right of repurchase shall terminate
                in the event that Stock is listed on an established stock exchange
                or is
                quoted regularly on the Nasdaq National Market. The fair market value
                shall be determined by the Board of Directors in its sole
                discretion.

            
	 	 
	
              Transfer
                of Option

            	
              Prior
                to your death, only you may exercise this Option. You cannot transfer
                or
                assign this Option. For instance, you may not sell this Option or
                use it
                as security for a loan. If you attempt to do any of these things,
                this
                Option will immediately become invalid. You may, however, dispose
                of this
                Option in your will.

            
	 	 
	 	
              Regardless
                of any marital property settlement agreement, the Company is not
                obligated
                to honor a Notice of Exercise from your spouse or former spouse,
                nor is
                the Company obligated to recognize such individual’s interest in your
                Option in any other way.

            
	 	 
	 	 
	
              Retention
                Rights

            	
              This
                Agreement does not give you the right to be retained by the Company
                in any
                capacity. The Company reserves the right to terminate your Service
                at any
                time and for any reason.

            
	 	 
	
              Shareholder
                Rights

            	
              Neither
                you, nor your estate or heirs, have any rights as a shareholder of
                the
                Company until a certificate for the Shares acquired upon exercise
                of this
                Option has been issued. No adjustments are made for dividends or
                other
                rights if the applicable record date occurs before your stock certificate
                is issued, except as described in the Plan.

            
	 	 
	
              Adjustments

            	
              In
                the event of a stock split, a stock dividend or a similar change
                in the
                Company’s Stock, the number of Shares covered by this Option and the
                Exercise Price per share may be adjusted pursuant to the Plan. Your
                Option
                shall be subject to the terms of the agreement of merger, liquidation
                or
                reorganization in the event the Company is subject to such corporate
                activity.

            
	 	 
	
              Legends

            	
              All
                certificates representing the Shares issued upon exercise of this
                Option
                shall, where applicable, have endorsed thereon the following
                legends:

            

    

     

    
      
        
        

      

      
        -
          6
          -

        
          

        

      

      
        
        

      

    

     

    
      	 	
              “THE
                SECURITIES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN
                RESTRICTIONS ON TRANSFER AND OPTIONS TO PURCHASE SUCH SHARES SET
                FORTH IN
                AN AGREEMENT BETWEEN THE COMPANY AND THE REGISTERED HOLDER, OR SUCH
                HOLDER’S PREDECESSOR IN INTEREST. SUCH AGREEMENT IMPOSES CERTAIN TRANSFER
                RESTRICTIONS AND GRANTS CERTAIN REPURCHASE RIGHTS TO THE COMPANY
                (OR ITS
                ASSIGNS) UPON THE SALE OF THE SHARES OR UPON TERMINATION OF SERVICE
                WITH
                THE COMPANY. A COPY OF SUCH AGREEMENT IS ON FILE AT THE PRINCIPAL
                OFFICE
                OF THE COMPANY AND WILL BE FURNISHED UPON WRITTEN REQUEST TO THE
                SECRETARY
                OF THE COMPANY BY THE HOLDER OF SHARES REPRESENTED BY THIS
                CERTIFICATE.

            
	 	 
	 	
              THE
                SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED
                UNDER
                THE SECURITIES ACT OF 1933, OR THE SECURITIES LAWS OF ANY STATE,
                AND MAY
                BE OFFERED AND SOLD ONLY IF REGISTERED AND QUALIFIED PURSUANT TO
                THE
                RELEVANT PROVISIONS OF FEDERAL AND STATE SECURITIES LAWS OR IF THE
                COMPANY
                IS PROVIDED AN OPINION OF COUNSEL, SATISFACTORY TO THE COMPANY AND
                ITS
                COUNSEL, THAT REGISTRATION AND QUALIFICATION UNDER FEDERAL AND STATE
                SECURITIES LAWS IS NOT REQUIRED.”

            
	 	 
	
              Applicable
                Law

            	
              This
                Agreement will be interpreted and enforced under the laws of the
                State of
                California (without regard to their choice of law
                provisions).

            
	 	 
	
              The
                Plan and Other Agreements

            	
              The
                text of the Plan is incorporated in this Agreement by reference.
                Certain
                capitalized terms used in this Agreement are defined in the
                Plan.

               

              This
                Agreement, including its attachments, and the Plan constitute the
                entire
                understanding between you and the Company regarding this Option.
                Any prior
                agreements, commitments or negotiations concerning this Option are
                superseded.

            

    

    

    By
      signing the cover sheet of this Agreement, you agree to all of the terms and
      conditions described above and in the Plan. You also acknowledge that you have
      read Section 11, “Purchaser’s Investment Representations” of Attachment A and
      that you can and hereby do make the same representations with respect to the
      grant of this Option.

    

      
        
          
          

        

        
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            7
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