Document:

Exhibit
10.2

     

    NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS EXERCISABLE HAVE
BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY,
MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM,
OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS
EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE
SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY.  THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF
THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN SECURED BY SUCH SECURITIES.

    

    COMMON
STOCK PURCHASE WARRANT

    

    SIGNATURE
EXPLORATION & PRODUCTION CORP.

     

    
      
        	
                Warrant
      Shares: 207,493

              	
                Initial
      Exercise Date: February 10,
2010

              

      

    

     

    THIS
COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies
that, for value received, _______________________________ (the “Holder”), is
entitled, upon the terms and subject to the limitations on exercise and the
conditions hereinafter set forth, at any time on or after February 10, 2010 (the
“Initial Exercise
Date”) and on or prior to the close of business on February 10, 2015 (the
“Termination
Date”) but not thereafter, to subscribe for and purchase from Signature
Exploration & Production Corp., a Delaware corporation (the “Company”), up to
207,493 shares (the “Warrant Shares”) of
common stock, par value $.0001 per share, of the Company (the “Common
Stock”).  The purchase price of one share of Common Stock under
this Warrant shall be equal to the Exercise Price, as defined in Section
2(b).

     

    Section
1.    Definitions.  Capitalized
terms used and not otherwise defined herein shall have the meanings set forth in
that certain Convertible Promissory Note (the “Note”), dated
February 10, 2010, issued by the Company to the Holder.

     

    Section
2.     Exercise.

     

    a)           Exercise of
Warrant.  Exercise of the purchase rights represented by this
Warrant may be made, in whole or in part, at any time or times on or after the
Initial Exercise Date and on or before the Termination Date by delivery to the
Company of a duly executed facsimile copy of the Notice of Exercise Form
annexed  hereto (or such other office or agency of the Company as it
may designate by notice in writing to the registered Holder at the address of
such Holder appearing on the books of the Company); and, within 3 Trading Days
of the date said Notice of Exercise is delivered to the Company, the Company
shall have received  payment of the aggregate Exercise Price of the
shares thereby purchased by wire transfer or cashier’s check drawn on a United
States bank.  Notwithstanding anything herein to the contrary, the
Holder shall not be required to physically surrender this Warrant to the Company
until the Holder has purchased all of the Warrant Shares available hereunder and
the Warrant has been exercised in full, in which case, the Holder shall
surrender this Warrant to the Company for cancellation within 3 Trading Days of
the date the final Notice of Exercise is delivered to the
Company.  Partial exercises of this Warrant resulting in purchases of
a portion of the total number of Warrant Shares available hereunder shall have
the effect of lowering the outstanding number of Warrant Shares purchasable
hereunder in an amount equal to the applicable number of Warrant Shares
purchased.  The Holder and the Company shall maintain records showing
the number of Warrant Shares purchased and the date of such
purchases.  The Company shall deliver any objection to any Notice of
Exercise Form within 1 Business Day of receipt of such notice.  In the
event of any dispute or discrepancy, the records of the Holder shall be
controlling and determinative in the absence of manifest error. The Holder and
any assignee, by acceptance of this Warrant, acknowledge and agree that, by
reason of the provisions of this paragraph, following the purchase of a portion
of the Warrant Shares hereunder, the number of Warrant Shares available for
purchase hereunder at any given time may be less than the amount stated on the
face hereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    b)           Exercise
Price.  The exercise price per share of the Common Stock under
this Warrant shall be $0.75, subject to adjustment
hereunder (the “Exercise
Price”).

     

    c)           Cashless
Exercise.  This Warrant may also be exercised at such time by
means of a “cashless exercise” in which the Holder shall be entitled to receive
a certificate for the number of Warrant Shares equal to the quotient obtained by
dividing [(A-B) (X)] by (A), where:

     

    
      	
               
      

            	
              (A)
      = the VWAP on the Trading Day immediately preceding the date of such
      election;

            

    

    

    
      	
               
      

            	
              (B)
      = the Exercise Price of this Warrant, as adjusted;
  and

            

    

    

    
      (X) = the
number of Warrant Shares issuable upon exercise of this Warrant in accordance
with the terms of this Warrant by means of a cash exercise rather than a
cashless exercise.

    

    

    Notwithstanding
anything herein to the contrary, (i) on the Termination Date, this Warrant shall
be automatically exercised via cashless exercise pursuant to this Section 2(c)
and (ii) this Warrant may be exercised via a cashless exercise during the 30
Trading Days immediately prior to the Termination Date if there is no effective
Registration Statement registering, or no current prospectus available for, the
resale of the Warrant Shares by the Holder.

    

    d)           Exercise
Limitations  The Company shall not effect any exercise of this
Warrant, and a  Holder shall not have the right to exercise any
portion of this Warrant, pursuant to Section 2(c) or otherwise, to the extent
that after giving effect to such issuance after exercise as set forth on the
applicable Notice of Exercise, such Holder (together with such Holder’s
Affiliates, and any other person or entity acting as a group together with such
Holder or any of such Holder’s Affiliates), as set forth on the applicable
Notice of Exercise, would beneficially own in excess of the Beneficial Ownership
Limitation (as defined below).  For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by such Holder and its
Affiliates shall include the number of shares of Common Stock issuable upon
exercise of this Warrant with respect to which such determination is being made,
but shall exclude the number of shares of Common Stock which would be issuable
upon (A) exercise of the remaining, nonexercised portion of this Warrant
beneficially owned by such Holder or any of its Affiliates and (B) exercise or
conversion of the unexercised or nonconverted portion of any other securities of
the Company (including, without limitation, any other Debentures or Warrants)
subject to a limitation on conversion or exercise analogous to the limitation
contained herein beneficially owned by such Holder or any of its
affiliates.  Except as set forth in the preceding sentence, for purposes of
this Section 2(d)(i), beneficial ownership shall be calculated in accordance
with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder, it being acknowledged by a Holder that the Company is not
representing to such Holder that such calculation is in compliance with Section
13(d) of the Exchange Act and such Holder is solely responsible for any
schedules required to be filed in accordance therewith.   To the
extent that the limitation contained in this Section 2(d)(i) applies, the
determination of whether this Warrant is exercisable (in relation to other
securities owned by such Holder together with any Affiliates) and of which a
portion of this Warrant is exercisable shall be in the sole discretion of a
Holder, and the submission of a Notice of Exercise shall be deemed to be each
Holder’s determination of whether this Warrant is exercisable (in relation to
other securities owned by such Holder together with any Affiliates) and of which
portion of this Warrant is exercisable, in each case subject to such aggregate
percentage limitation, and the Company shall have no obligation to verify or
confirm the accuracy of such determination.   In addition, a
determination as to any group status as contemplated above shall be determined
in accordance with Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder.  For purposes of this Section
2(d)(i), in determining the number of outstanding shares of Common Stock, a
Holder may rely on the number of outstanding shares of Common Stock as reflected
in (x) the Company’s most recent Form 10-Q or Form 10-K, as the case may be, (y)
a more recent public announcement by the Company or (z) any other notice by the
Company or the Company’s Transfer Agent setting forth the number of shares of
Common Stock outstanding.  Upon the written or oral request of a Holder,
the Company shall within two Trading Days confirm orally and in writing to such
Holder the number of shares of Common Stock then outstanding.  In any case,
the number of outstanding shares of Common Stock shall be determined after
giving effect to the conversion or exercise of securities of the Company,
including this Warrant, by such Holder or its Affiliates since the date as of
which such number of outstanding shares of Common Stock was
reported.  The “Beneficial Ownership
Limitation” shall be 4.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common
Stock issuable upon exercise of this Warrant.  The Beneficial
Ownership Limitation provisions of this Section 2(d)(i) may be waived by such
Holder, at the election of such Holder, upon not less than 61 days’ prior notice
to the Company to change the Beneficial Ownership Limitation to 9.99% of the
number of shares of the Common Stock outstanding immediately after giving effect
to the issuance of shares of Common Stock upon exercise of this Warrant, and the
provisions of this Section 2(d) shall continue to apply.  Upon such a
change by a Holder of the Beneficial Ownership Limitation from such 4.99%
limitation to such 9.99% limitation, the Beneficial Ownership Limitation may not
be further waived by such Holder.  The provisions of this paragraph
shall be construed and implemented in a manner otherwise than in strict
conformity with the terms of this Section 2(d)(i) to correct this paragraph (or
any portion hereof) which may be defective or inconsistent with the intended
Beneficial Ownership Limitation herein contained or to make changes or
supplements necessary or desirable to properly give effect to such limitation.
The limitations contained in this paragraph shall apply to a successor holder of
this Warrant.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    e)           Mechanics of
Exercise.

     

    i.      Authorization of Warrant
Shares.  The Company covenants that all Warrant Shares which
may be issued upon the exercise of the purchase rights represented by this
Warrant will, upon exercise of the purchase rights represented by this Warrant,
be duly authorized, validly issued, fully paid and nonassessable and free from
all taxes, liens and charges created by the Company in respect of the issue
thereof (other than taxes in respect of any transfer occurring contemporaneously
with such issue).

     

    ii.    Delivery of Certificates
Upon Exercise.  Certificates for shares purchased hereunder
shall be transmitted by the transfer agent of the Company to the Holder by
crediting the account of the Holder’s prime broker with the Depository Trust
Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the
Company is a participant in such system, and otherwise by physical delivery to
the address specified by the Holder in the Notice of Exercise within 3 Trading
Days from the delivery to the Company of the Notice of Exercise Form, surrender
of this Warrant (if required) and payment of the aggregate Exercise Price as set
forth above (“Warrant
Share Delivery Date”).  This Warrant shall be deemed to have
been exercised on the date the Exercise Price is received by the
Company.  The Warrant Shares shall be deemed to have been issued, and
Holder or any other person so designated to be named therein shall be deemed to
have become a holder of record of such shares for all purposes, as of the date
the Warrant has been exercised by payment to the Company of the Exercise Price
(or by cashless exercise, if permitted) and all taxes required to be paid by the
Holder, if any, pursuant to Section 2(e)(vii) prior to the issuance of such
shares, have been paid.

     

    iii.   Delivery of New Warrants
Upon Exercise.  If this Warrant shall have been exercised in
part, the Company shall, at the request of a Holder and upon surrender of this
Warrant certificate, at the time of delivery of the certificate or certificates
representing Warrant Shares, deliver to Holder a new Warrant evidencing the
rights of Holder to purchase the unpurchased Warrant Shares called for by this
Warrant, which new Warrant shall in all other respects be identical with this
Warrant.

     

    iv.   Rescission
Rights.  If the Company fails to cause its transfer agent to
transmit to the Holder a certificate or certificates representing the Warrant
Shares pursuant to this Section 2(e)(iv) by the Warrant Share Delivery Date,
then the Holder will have the right to rescind such exercise.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    v.     Compensation for Buy-In on
Failure to Timely Deliver Certificates Upon Exercise.  In
addition to any other rights available to the Holder, if the Company fails to
cause its transfer agent to transmit to the Holder a certificate or certificates
representing the Warrant Shares pursuant to an exercise on or before the Warrant
Share Delivery Date, and if after such date the Holder is required by its broker
to purchase (in an open market transaction or otherwise) or the Holder’s
brokerage firm otherwise purchases, shares of Common Stock to deliver in
satisfaction of a sale by the Holder of the Warrant Shares which the Holder
anticipated receiving upon such exercise (a “Buy-In”), then the
Company shall (1) pay in cash to the Holder the amount by which (x) the Holder’s
total purchase price (including brokerage commissions, if any) for the shares of
Common Stock so purchased exceeds (y) the amount obtained by multiplying (A) the
number of Warrant Shares that the Company was required to deliver to the Holder
in connection with the exercise at issue times (B) the price at which the sell
order giving rise to such purchase obligation was executed, and (2) at the
option of the Holder, either reinstate the portion of the Warrant and equivalent
number of Warrant Shares for which such exercise was not honored or deliver to
the Holder the number of shares of Common Stock that would have been issued had
the Company timely complied with its exercise and delivery obligations
hereunder.  For example, if the Holder purchases Common Stock having a
total purchase price of $11,000 to cover a Buy-In with respect to an attempted
exercise of shares of Common Stock with an aggregate sale price giving rise to
such purchase obligation of $10,000, under clause (1) of the immediately
preceding sentence the Company shall be required to pay the Holder $1,000. The
Holder shall provide the Company written notice indicating the amounts payable
to the Holder in respect of the Buy-In and, upon request of the Company,
evidence of the amount of such loss.  Nothing herein shall limit a
Holder’s right to pursue any other remedies available to it hereunder, at law or
in equity including, without limitation, a decree of specific performance and/or
injunctive relief with respect to the Company’s failure to timely deliver
certificates representing shares of Common Stock upon exercise of the Warrant as
required pursuant to the terms hereof.

     

    vi.   No Fractional Shares or
Scrip.  No fractional shares or scrip representing fractional
shares shall be issued upon the exercise of this Warrant.  As to any
fraction of a share which Holder would otherwise be entitled to purchase upon
such exercise, the Company shall at its election, either pay a cash adjustment
in respect of such final fraction in an amount equal to such fraction multiplied
by the Exercise Price or round up to the next whole share.

     

    vii.  Charges, Taxes and
Expenses.  Issuance of certificates for Warrant Shares shall be
made without charge to the Holder for any issue or transfer tax or other
incidental expense in respect of the issuance of such certificate, all of which
taxes and expenses shall be paid by the Company, and such certificates shall be
issued in the name of the Holder or in such name or names as may be directed by
the Holder; provided, however, that in the
event certificates for Warrant Shares are to be issued in a name other than the
name of the Holder, this Warrant when surrendered for exercise shall be
accompanied by the Assignment Form attached hereto duly executed by the Holder;
and the Company may require, as a condition thereto, the payment of a sum
sufficient to reimburse it for any transfer tax incidental thereto.

     

    viii. Closing of
Books.  The Company will not close its stockholder books or
records in any manner which prevents the timely exercise of this Warrant,
pursuant to the terms hereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    Section
3.     Certain Adjustments.

     

    a)           Stock Dividends and
Splits. If the Company, at any time while this Warrant is outstanding:
(A) pays a stock dividend or otherwise make a distribution or distributions on
shares of its Common Stock or any other equity or equity equivalent securities
payable in shares of Common Stock (which, for avoidance of doubt, shall not
include any shares of Common Stock issued by the Company upon exercise of this
Warrant), (B) subdivides outstanding shares of Common Stock into a larger number
of shares, (C) combines (including by way of reverse stock split) outstanding
shares of Common Stock into a smaller number of shares, or (D) issues by
reclassification of shares of the Common Stock any shares of capital stock of
the Company, then in each case the Exercise Price shall be multiplied by a
fraction of which the numerator shall be the number of shares of Common Stock
(excluding treasury shares, if any) outstanding immediately before such event
and of which the denominator shall be the number of shares of Common Stock
outstanding immediately after such event and the number of shares issuable upon
exercise of this Warrant shall be proportionately adjusted.  Any
adjustment made pursuant to this Section 3(a) shall become effective immediately
after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the
effective date in the case of a subdivision, combination or
re-classification.

     

    b)           Subsequent Equity
Sales. If the Company or any Subsidiary thereof, as applicable, at any
time while this Warrant is outstanding, shall sell or grant any option to
purchase or sell or grant any right to reprice its securities, or otherwise
dispose of or issue (or announce any offer, sale, grant or any option to
purchase or other disposition) any Common Stock or Common Stock Equivalents
entitling any Person to acquire shares of Common Stock, at an effective price
per share less than the then Exercise Price (such lower price, the “Base Share Price” and
such issuances collectively, a “Dilutive  Issuance”)
(if the holder of the Common Stock or Common Stock Equivalents so issued shall
at any time, whether by operation of purchase price adjustments, reset
provisions, floating conversion, exercise or exchange prices or otherwise, or
due to warrants, options or rights per share which are issued in connection with
such issuance, be entitled to receive shares of Common Stock at an effective
price per share which is less than the Exercise Price, such issuance shall be
deemed to have occurred for less than the Exercise Price on such date of the
Dilutive Issuance), then the Exercise Price shall be reduced and only reduced to
equal the Base Share Price and the number of Warrant Shares issuable hereunder
shall be increased such that the aggregate Exercise Price payable hereunder,
after taking into account the decrease in the Exercise Price, shall be equal to
the aggregate Exercise Price prior to such adjustment, provided however that,
this Exercise Price may not be adjusted below $0.01.  Such adjustment
shall be made whenever such Common Stock or Common Stock Equivalents are
issued.  Notwithstanding the foregoing, no adjustments shall be made,
paid or issued under this Section 3(b) in respect of an Exempt
Issuance.  The Company shall notify the Holder in writing, no later
than the Trading Day following the issuance of any Common Stock or Common Stock
Equivalents subject to this section, indicating therein the applicable issuance
price, or applicable reset price, exchange price, conversion price and other
pricing terms (such notice the “Dilutive Issuance
Notice”).  For purposes of clarification, whether or not the
Company provides a Dilutive Issuance Notice pursuant to this Section 3(b), upon
the occurrence of any Dilutive Issuance, after the date of such Dilutive
Issuance the Holder is entitled to receive a number of Warrant Shares based upon
the Base Share Price regardless of whether the Holder accurately refers to the
Base Share Price in the Notice of Exercise.  Notwithstanding anything
in this Warrant and specifically this Section 3. b) to the contrary, there shall
be no reduction in the Exercise Price of this Warrant based upon the conversion
price of any note or the exercise price of any warrant issued by the Company to
__________________________________.

     

    c)           Subsequent Rights
Offerings.  If the Company, at any time while the Warrant is
outstanding, shall issue rights, options or warrants to all holders of Common
Stock (and not to Holders) entitling them to subscribe for or purchase shares of
Common Stock at a price per share less than the VWAP at the record date
mentioned below, then the Exercise Price shall be multiplied by a fraction, of
which the denominator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of additional shares of Common Stock offered for subscription or purchase, and
of which the numerator shall be the number of shares of the Common Stock
outstanding on the date of issuance of such rights or warrants plus the number
of shares which the aggregate offering price of the total number of shares so
offered (assuming receipt by the Company in full of all consideration payable
upon exercise of such rights, options or warrants) would purchase at such
VWAP.  Such adjustment shall be made whenever such rights or warrants
are issued, and shall become effective immediately after the record date for the
determination of stockholders entitled to receive such rights, options or
warrants.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    d)           Pro Rata
Distributions.  If the Company, at any time prior to the
Termination Date, shall distribute to all holders of Common Stock (and not to
Holders of the Warrants) evidences of its indebtedness or assets (including cash
and cash dividends) or rights or warrants to subscribe for or purchase any
security other than the Common Stock (which shall be subject to Section 3(b)),
then in each such case the Exercise Price shall be adjusted by multiplying the
Exercise Price in effect immediately prior to the record date fixed for
determination of stockholders entitled to receive such distribution by a
fraction of which the denominator shall be the VWAP determined as of the record
date mentioned above, and of which the numerator shall be such VWAP on such
record date less the then per share fair market value at such record date of the
portion of such assets or evidence of indebtedness so distributed applicable to
one outstanding share of the Common Stock as determined by the Board of
Directors in good faith.  In either case the adjustments shall be
described in a statement provided to the Holder of the portion of assets or
evidences of indebtedness so distributed or such subscription rights applicable
to one share of Common Stock.  Such adjustment shall be made whenever
any such distribution is made and shall become effective immediately after the
record date mentioned above.

     

    e)           Fundamental
Transaction. If, at any time while this Warrant is outstanding, (A) the
Company effects any merger or consolidation of the Company with or into another
Person, (B) the Company effects any sale of all or substantially all of its
assets in one or a series of related transactions, (C) any tender offer or
exchange offer (whether by the Company or another Person) is completed pursuant
to which holders of Common Stock are permitted to tender or exchange their
shares for other securities, cash or property, or (D) the Company effects any
reclassification of the Common Stock or any compulsory share exchange pursuant
to which the Common Stock is effectively converted into or exchanged for other
securities, cash or property (in any such case, a “Fundamental
Transaction”), then, upon any subsequent exercise of this Warrant, the
Holder shall have the right to receive, for each Warrant Share that would have
been issuable upon such exercise immediately prior to the occurrence of such
Fundamental Transaction, at the option of the Holder, (a) upon exercise of this
Warrant, the number of shares of Common Stock of the successor or acquiring
corporation or of the Company, if it is the surviving corporation, and any
additional consideration (the “Alternate
Consideration”) receivable upon or as a result of such reorganization,
reclassification, merger, consolidation or disposition of assets by a Holder of
the number of shares of Common Stock for which this Warrant is exercisable
immediately prior to such event or (b) if the Company is acquired in an all cash
transaction, cash equal to the value of this Warrant as determined in accordance
with the Black-Scholes option pricing formula.  For purposes of any
such exercise, the determination of the Exercise Price shall be appropriately
adjusted to apply to such Alternate Consideration based on the amount of
Alternate Consideration issuable in respect of one share of Common Stock in such
Fundamental Transaction, and the Company shall apportion the Exercise Price
among the Alternate Consideration in a reasonable manner reflecting the relative
value of any different components of the Alternate Consideration.  If
holders of Common Stock are given any choice as to the securities, cash or
property to be received in a Fundamental Transaction, then the Holder shall be
given the same choice as to the Alternate Consideration it receives upon any
exercise of this Warrant following such Fundamental Transaction.  To
the extent necessary to effectuate the foregoing provisions, any successor to
the Company or surviving entity in such Fundamental Transaction shall issue to
the Holder a new warrant consistent with the foregoing provisions and evidencing
the Holder’s right to exercise such warrant into Alternate Consideration. The
terms of any agreement pursuant to which a Fundamental Transaction is effected
shall include terms requiring any such successor or surviving entity to comply
with the provisions of this Section 3(e) and insuring that this Warrant (or any
such replacement security) will be similarly adjusted upon any subsequent
transaction analogous to a Fundamental Transaction.

     

    f)           Calculations. All
calculations under this Section 3 shall be made to the nearest cent or the
nearest 1/100th of a share, as the case may be. For purposes of this Section 3,
the number of shares of Common Stock deemed to be issued and outstanding as of a
given date shall be the sum of the number of shares of Common Stock (excluding
treasury shares, if any) issued and outstanding.

     

    g)           Voluntary Adjustment By
Company. The Company may at any time during the term of this Warrant
reduce the then current Exercise Price to any amount and for any period of time
deemed appropriate by the Board of Directors of the Company.

     

    h)           Notice to
Holder.

     

    i.      Adjustment to Exercise
Price. Whenever the Exercise Price is adjusted pursuant to any provision
of this Section 3, the Company shall promptly mail to the Holder a notice
setting forth the Exercise Price after such adjustment and setting forth a brief
statement of the facts requiring such adjustment. If the Company issues a
variable rate security, the Company shall be deemed to have issued Common Stock
or Common Stock Equivalents at the lowest possible conversion or exercise price
at which such securities may be converted or exercised in the case of any
transaction in which securities are issued at a variable price.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    ii.     Notice to Allow Exercise by
Holder. If (A) the Company shall declare a dividend (or any other
distribution in whatever form) on the Common Stock; (B) the Company shall
declare a special nonrecurring cash dividend on or a redemption of the Common
Stock; (C) the Company shall authorize the granting to all holders of the Common
Stock rights or warrants to subscribe for or purchase any shares of capital
stock of any class or of any rights; (D) the approval of any stockholders of the
Company shall be required in connection with any reclassification of the Common
Stock, any consolidation or merger to which the Company is a party, any sale or
transfer of all or substantially all of the assets of the Company, of any
compulsory share exchange whereby the Common Stock is converted into other
securities, cash or property; (E) the Company shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of the
Company; then, in each case, the Company shall cause to be mailed to the Holder
at its last address as it shall appear upon the Warrant Register of the Company,
at least 20 calendar days prior to the applicable record or effective date
hereinafter specified, a notice stating (x) the date on which a record is to be
taken for the purpose of such dividend, distribution, redemption, rights or
warrants, or if a record is not to be taken, the date as of which the holders of
the Common Stock of record to be entitled to such dividend, distributions,
redemption, rights or warrants are to be determined or (y) the date on which
such reclassification, consolidation, merger, sale, transfer or share exchange
is expected to become effective or close, and the date as of which it is
expected that holders of the Common Stock of record shall be entitled to
exchange their shares of the Common Stock for securities, cash or other property
deliverable upon such reclassification, consolidation, merger, sale, transfer or
share exchange; provided that the failure to mail such notice or any defect
therein or in the mailing thereof shall not affect the validity of the corporate
action required to be specified in such notice.  The Holder is
entitled to exercise this Warrant during the 20-day period commencing on the
date of such notice to the effective date of the event triggering such
notice.

    

    Section
4.     Transfer of
Warrant.

     

    a)           Transferability.  Subject
to compliance with any applicable securities laws and the conditions set forth
in Section 4(d) hereof, this Warrant and all rights hereunder (including,
without limitation, any registration rights) are transferable, in whole or in
part, upon surrender of this Warrant at the principal office of the Company or
its designated agent, together with a written assignment of this Warrant
substantially in the form attached hereto duly executed by the Holder or its
agent or attorney and funds sufficient to pay any transfer taxes payable upon
the making of such transfer.  Upon such surrender and, if required,
such payment, the Company shall execute and deliver a new Warrant or Warrants in
the name of the assignee or assignees and in the denomination or denominations
specified in such instrument of assignment, and shall issue to the assignor a
new Warrant evidencing the portion of this Warrant not so assigned, and this
Warrant shall promptly be cancelled.  A Warrant, if properly assigned,
may be exercised by a new holder for the purchase of Warrant Shares without
having a new Warrant issued.

     

    b)           New Warrants. This
Warrant may be divided or combined with other Warrants upon presentation hereof
at the aforesaid office of the Company, together with a written notice
specifying the names and denominations in which new Warrants are to be issued,
signed by the Holder or its agent or attorney.  Subject to compliance
with Section 4(a), as to any transfer which may be involved in such division or
combination, the Company shall execute and deliver a new Warrant or Warrants in
exchange for the Warrant or Warrants to be divided or combined in accordance
with such notice.

     

    c)           Warrant Register. The
Company shall register this Warrant, upon records to be maintained by the
Company for that purpose (the “Warrant Register”),
in the name of the record Holder hereof from time to time.  The
Company may deem and treat the registered Holder of this Warrant as the absolute
owner hereof for the purpose of any exercise hereof or any distribution to the
Holder, and for all other purposes, absent actual notice to the
contrary.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    d)           Transfer
Restrictions. If, at the time of the surrender of this Warrant in connection with
any transfer of this Warrant, the transfer of this Warrant shall not be
registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws, the
Company may require, as a condition of allowing such transfer (i) that the
Holder or transferee of this Warrant, as the case may be, furnish to the Company
a written opinion of counsel (which opinion shall be in form, substance and
scope customary for opinions of counsel in comparable transactions) to the
effect that such transfer may be made without registration under the Securities Act and under applicable state securities
or blue sky laws, (ii) that the holder or transferee execute and deliver to the
Company an investment letter in form and substance acceptable to the Company and
(iii) that the transferee be an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7), or (a)(8)
promulgated under the Securities Act or a “qualified institutional buyer” as
defined in Rule 144A(a) under the Securities Act.

     

    Section
5.     Miscellaneous.

     

    a)           No Rights as Shareholder
Until Exercise.  This Warrant does not entitle the Holder to
any voting rights or other rights as a shareholder of the Company prior to the
exercise hereof as set forth in Section 2(e)(ii).

     

    b)           Loss, Theft, Destruction or
Mutilation of Warrant. The Company covenants that upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant or any stock certificate relating to
the Warrant Shares, and in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to it (which, in the case of the Warrant, shall
not include the posting of any bond), and upon surrender and cancellation of
such Warrant or stock certificate, if mutilated, the Company will make and
deliver a new Warrant or stock certificate of like tenor and dated as of such
cancellation, in lieu of such Warrant or stock certificate.

     

    c)           Saturdays, Sundays,
Holidays, etc.  If the last or appointed day for the taking of
any action or the expiration of any right required or granted herein shall not
be a Business Day, then such action may be taken or such right may be exercised
on the next succeeding Business Day.

     

    d)           Authorized
Shares.

     

    The
Company covenants that during the period the Warrant is outstanding, it will
reserve from its authorized and unissued Common Stock a sufficient number of
shares to provide for the issuance of the Warrant Shares upon the exercise of
any purchase rights under this Warrant.  The Company further covenants
that its issuance of this Warrant shall constitute full authority to its
officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for the Warrant Shares upon the
exercise of the purchase rights under this Warrant.  The Company will
take all such reasonable action as may be necessary to assure that such Warrant
Shares may be issued as provided herein without violation of any applicable law
or regulation, or of any requirements of the Trading Market upon which the
Common Stock may be listed.

     

    Except
and to the extent as waived or consented to by the Holder, the Company shall not
by any action, including, without limitation, amending its certificate of
incorporation or through any reorganization, transfer of assets, consolidation,
merger, dissolution, issue or sale of securities or any other voluntary action,
avoid or seek to avoid the observance or performance of any of the terms of this
Warrant, but will at all times in good faith assist in the carrying out of all
such terms and in the taking of all such actions as may be necessary or
appropriate to protect the rights of Holder as set forth in this Warrant against
impairment.  Without limiting the generality of the foregoing, the
Company will (a) not increase the par value of any Warrant Shares above the
amount payable therefor upon such exercise immediately prior to such increase in
par value, (b) take all such action as may be necessary or appropriate in order
that the Company may validly and legally issue fully paid and nonassessable
Warrant Shares upon the exercise of this Warrant, and (c) use commercially
reasonable efforts to obtain all such authorizations, exemptions or consents
from any public regulatory body having jurisdiction thereof as may be necessary
to enable the Company to perform its obligations under this
Warrant.

     

    Before
taking any action which would result in an adjustment in the number of Warrant
Shares for which this Warrant is exercisable or in the Exercise Price, the
Company shall obtain all such authorizations or exemptions thereof, or consents
thereto, as may be necessary from any public regulatory body or bodies having
jurisdiction thereof.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    e)           Jurisdiction. All
questions concerning the construction, validity, enforcement and interpretation
of this Warrant shall be determined in accordance with the provisions of the
Note.

     

    f)           Restrictions.  The
Holder acknowledges that the Warrant Shares acquired upon the exercise of this
Warrant, if not registered, will have restrictions upon resale imposed by state
and federal securities laws.

     

    g)           Nonwaiver and
Expenses.  No course of dealing or any delay or failure to
exercise any right hereunder on the part of Holder shall operate as a waiver of
such right or otherwise prejudice Holder’s rights, powers or remedies,
notwithstanding the fact that all rights hereunder terminate on the Termination
Date.  If the Company willfully and knowingly fails to comply with any
provision of this Warrant, which results in any material damages to the Holder,
the Company shall pay to Holder such amounts as shall be sufficient to cover any
costs and expenses including, but not limited to, reasonable attorneys’ fees,
including those of appellate proceedings, incurred by Holder in collecting any
amounts due pursuant hereto or in otherwise enforcing any of its rights, powers
or remedies hereunder.

     

    h)           Notices.  Any
notice, request or other document required or permitted to be given or delivered
to the Holder by the Company shall be delivered in accordance with the notice
provisions of the Note.

     

    i)           
Limitation of
Liability.  No provision hereof, in the absence of any
affirmative action by Holder to exercise this Warrant to purchase Warrant
Shares, and no enumeration herein of the rights or privileges of Holder, shall
give rise to any liability of Holder for the purchase price of any Common Stock
or as a stockholder of the Company, whether such liability is asserted by the
Company or by creditors of the Company.

     

    j)           
Remedies.  Holder,
in addition to being entitled to exercise all rights granted by law, including
recovery of damages, will be entitled to specific performance of its rights
under this Warrant.  The Company agrees that monetary damages would
not be adequate compensation for any loss incurred by reason of a breach by it
of the provisions of this Warrant and hereby agrees to waive and not to assert
the defense in any action for specific performance that a remedy at law would be
adequate.

     

    k)           Successors and
Assigns.  Subject to applicable securities laws, this Warrant
and the rights and obligations evidenced hereby shall inure to the benefit of
and be binding upon the successors of the Company and the successors and
permitted assigns of Holder.  The provisions of this Warrant are
intended to be for the benefit of all Holders from time to time of this Warrant
and shall be enforceable by any such Holder or holder of Warrant
Shares.

     

    l)           
Amendment.  This
Warrant may be modified or amended or the provisions hereof waived with the
written consent of the Company and the Holder.

     

    m)          Severability.  Wherever
possible, each provision of this Warrant shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Warrant shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provisions or the remaining provisions of
this Warrant.

     

    n)           Headings.  The
headings used in this Warrant are for the convenience of reference only and
shall not, for any purpose, be deemed a part of this Warrant.

    

    ********************

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the Company has caused this Warrant to be executed by its
officer thereunto duly authorized as of the date first above
indicated.

    

    
      
        
          	 
      	
                  SIGNATURE
      EXPLORATION & PRODUCTION CORP.

                
	 
      	 
      
	 
      	
                  By:

                	 
      
	 
      	 
      	
                  Name:

                
	 
      	 
      	
                  Title

                

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    NOTICE
OF EXERCISE

    

    TO:           SIGNATURE
EXPLORATION & PRODUCTION CORP.

    

    (1)   The
undersigned hereby elects to purchase ________ Warrant Shares of the Company
pursuant to the terms of the attached Warrant (only if exercised in full), and
tenders herewith payment of the exercise price in full, together with all
applicable transfer taxes, if any.

     

    (2)   Payment
shall take the form of (check applicable box):

     

    o in lawful money of the
United States; or

     

    o [if permitted] the
cancellation of such number of Warrant Shares as is necessary, in accordance
with the formula set forth in subsection 2(c), to exercise this Warrant with
respect to the maximum number of Warrant Shares purchasable pursuant to the
cashless exercise procedure set forth in subsection 2(c).

     

    (3)   Please
issue a certificate or certificates representing said Warrant Shares in the name
of the undersigned or in such other name as is specified below:

     

    _______________________________

    

    The
Warrant Shares shall be delivered to the following DWAC Account Number or by
physical delivery of a certificate to:

    

    _______________________________

    

    _______________________________

    

    _______________________________

    

    (4)   Accredited
Investor.  The undersigned is an “accredited investor” as
defined in Regulation D promulgated under the Securities Act of 1933, as
amended.

    

    [SIGNATURE
OF HOLDER]

    

    Name of
Investing Entity:
________________________________________________________________________

    Signature of Authorized Signatory of
Investing Entity:
_________________________________________________

    Name of
Authorized Signatory:
___________________________________________________________________

    Title of
Authorized Signatory:
____________________________________________________________________

    Date:
________________________________________________________________________________________

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ASSIGNMENT
FORM

    

    (To
assign the foregoing warrant, execute

    this form
and supply required information.

    Do not
use this form to exercise the warrant.)

    

    FOR VALUE
RECEIVED, [____] all of or [_______] shares of the foregoing Warrant and all
rights evidenced thereby are hereby assigned to

    

    _______________________________________________
whose address is

    

    _______________________________________________________________.

    

    _______________________________________________________________

    

    Dated:  ______________,
_______

    

    
      
        
          	 
      	
                  Holder’s
      Signature:

                	
                  _____________________________

                
	 
      	 
      	 
      
	 
      	
                  Holder’s
      Address:

                	
                  _____________________________

                
	 
      	 
      	 
      
	 
      	 
      	
                  _____________________________

                

        

      

    

    

    Signature
Guaranteed:  ___________________________________________

    

    NOTE:  The
signature to this Assignment Form must correspond with the name as it appears on
the face of the Warrant, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a bank or trust
company.  Officers of corporations and those acting in a fiduciary or
other representative capacity should file proper evidence of authority to assign
the foregoing Warrant.PATIENT
SAFETY TECHNOLOGIES, INC.

    2009
STOCK OPTION PLAN

    NOTICE
OF GRANT OF OPTION

    

    The
Optionee named below is hereby granted an option (the “Option”) to purchase certain shares
of common stock (“Stock”) of Patient Safety
Technologies, Inc. (the “Corporation”)
pursuant to the Corporation’s 2009 Stock Option Plan (the “Plan”) as
follows:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              
                                                
                                                  
                                                    
                                                      
                                                        
                                                          
                                                            
                                                              
                                                                
                                                                  
                                                                    
                                                                      
                                                                        
                                                                          
                                                                            
                                                                              
                                                                                
                                                                                  
                                                                                    
                                                                                      
                                                                                        
                                                                                          
                                                                                            
                                                                                              
                                                                                                
                                                                                                  
                                                                                                    
                                                                                                      
                                                                                                        
                                                                                                          
                                                                                                            
                                                                                                              
                                                                                                                
                                                                                                                  
                                                                                                                    
                                                                                                                      
                                                                                                                        
                                                                                                                          
                                                                                                                            
                                                                                                                              
                                                                                                                                
                                                                                                                                  
                                                                                                                                    
                                                                                                                                      
                                                                                                                                        
                                                                                                                                          
                                                                                                                                            
                                                                                                                                              
                                                                                                                                                
                                                                                                                                                  	
                                                                                                                                                          Optionee:

                                                                                                                                                        	 
      	 
      	 
	 	 	 	 
	
                                                                                                                                                          Date of Grant:

                                                                                                                                                        	 
      	 
      	 
	 	 	 	 
	
                                                                                                                                                          Number of Option
      Shares:

                                                                                                                                                        	 
      	 
      	 
	 	 	 	 
	
                                                                                                                                                          Exercise Price:

                                                                                                                                                        	 
      	
                                                                                                                                                          $____
      per share

                                                                                                                                                        	 
	 	 	 	 
	
                                                                                                                                                          Type of Option:

                                                                                                                                                        	 
      	
                                                                                                                                                          ___
      Incentive Option         ___
      Non-Qualified Option     (check
    one)

                                                                                                                                                        	 
	 	 	 	 
	
                                                                                                                                                          Vesting
      Commencement Date:

                                                                                                                                                        	 
      	 
      	 
	 	 	 	 
	
                                                                                                                                                          Initial Vesting Date:

                                                                                                                                                        	 
      	
                                                                                                                                                          The
      date six months after the Vesting Commencement Date

                                                                                                                                                        	 
	 	 	 	 
	
                                                                                                                                                          Option Expiration
      Date:

                                                                                                                                                        	 
      	
                                                                                                                                                          The
      date ten (10) years after the Date of Grant

                                                                                                                                                        	 
	 	 	 	 
	
                                                                                                                                                          Vested Shares:

                                                                                                                                                        	 
      	
                                                                                                                                                          Except
      as provided in the Option Agreement, the number of Vested Shares
      (disregarding any resulting fractional share) as of any date is determined
      by multiplying the Number of Option Shares by the “Vested
      Ratio”
      determined as of such date as follows:

                                                                                                                                                        	 
	 	 	 	 	 	 
	 
      	 
      	 
      	 
      	
                                                                                                                                                          Vested Ratio

                                                                                                                                                        	 
	 
      	 
      	
                                                                                                                                                          Prior
      to Initial Vesting Date

                                                                                                                                                        	 
      	
                                                                                                                                                          0

                                                                                                                                                        	 
	 	 	 	 	 	 
	 
      	 
      	
                                                                                                                                                          On
      Initial Vesting Date, provided Optionee’s Service has not terminated prior
      to such date

                                                                                                                                                        	 
      	
                                                                                                                                                          [1/4]

                                                                                                                                                        	 
	 	 	 	 	 	 
	 
      	 
      	
                                                                                                                                                          Plus

                                                                                                                                                        	 
      	 
      	 
	 	 	 	 	 	 
	 
      	
                                                                                                                                                            

                                                                                                                                                        	
                                                                                                                                                          For
      each additional full month of Optionee’s continuous service from Initial
      Vesting Date until the Vested Ratio equals 1/1, an
    additional

                                                                                                                                                        	
                                                                                                                                                            

                                                                                                                                                        	
                                                                                                                                                          [1/48]

                                                                                                                                                        	 

                                                                                                                                                

                                                                                                                                              

                                                                                                                                            

                                                                                                                                          

                                                                                                                                        

                                                                                                                                      

                                                                                                                                    

                                                                                                                                  

                                                                                                                                

                                                                                                                              

                                                                                                                            

                                                                                                                          

                                                                                                                        

                                                                                                                      

                                                                                                                    

                                                                                                                  

                                                                                                                

                                                                                                              

                                                                                                            

                                                                                                          

                                                                                                        

                                                                                                      

                                                                                                    

                                                                                                  

                                                                                                

                                                                                              

                                                                                            

                                                                                          

                                                                                        

                                                                                      

                                                                                    

                                                                                  

                                                                                

                                                                              

                                                                            

                                                                          

                                                                        

                                                                      

                                                                    

                                                                  

                                                                

                                                              

                                                            

                                                          

                                                        

                                                      

                                                    

                                                  

                                                

                                              

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    

    By their
signatures below, the Corporation and the Optionee agree that the Option is
governed by the Plan, this Grant Notice and the Option Agreement which is
attached to and made a part of this document.  The Optionee
acknowledges receipt of the Plan and the Option Agreement, represents that the
Optionee has read and is familiar with their provisions, and hereby accepts the
Option subject to all of their terms and conditions.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                	
                                        PATIENT
      SAFETY TECHNOLOGIES, INC.

                                      	 	
                                        OPTIONEE

                                      
	 
      	 
      	 	 
      
	
                                        By:

                                      	 
      	 	 
      
	 
      	 
      	 	
                                        Signature

                                      
	
                                        Its:

                                      	 
      	 	 
      
	 
      	 
      	 	
                                        Date

                                      
	
                                        Address:

                                      	 	 
      
	 
      	 	
                                        Address

                                      
	 
      	 	 
      

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    PATIENT
SAFETY TECHNOLOGIES, INC.

    2009
STOCK OPTION PLAN

    OPTION
AGREEMENT

     

    Patient
Safety Technologies, Inc. has granted to the Optionee named in the Notice of Grant of Option
(the “Grant
Notice”) to which this Option Agreement (the “Option
Agreement”) is attached, an option (the “Option”)
pursuant to the Corporation’s 2009 Stock Option Plan (the “Plan”) to
purchase certain shares of common stock of the Corporation (“Stock”)
upon the terms and conditions set forth in this Option Agreement, and the terms
and conditions set forth in the Plan and the Grant Notice, which are
incorporated into this Option Agreement by reference.  By signing the
Grant Notice, the Optionee: (a) acknowledges receipt of, and represents that the
Optionee has read and is familiar with the terms and conditions of, the Plan,
the Grant Notice and this Option Agreement, (b) accepts the Option subject to
all of the terms and conditions of the Plan, the Grant Notice and this Option
Agreement, and (c) agrees to accept as binding, conclusive and final all
decisions or interpretations of the Board of Directors of the Corporation (the
“Board”) upon any
questions arising under the Plan, Grant Notice and this Option
Agreement.  In the event of a conflict between the terms and
conditions of the Plan and this Option Agreement, the terms and conditions of
the Plan shall prevail.  Capitalized terms not defined in this Option
Agreement shall have the meanings defined in the Plan.

     

    
      	
              1.

            	
              EXERCISE
      OF THE OPTION.

            

    

     

    1.1          Right to
Exercise.  Except as otherwise provided herein, the Option
shall be exercisable on and after the Initial Vesting Date and prior to the
termination of the Option (as provided in Section 3 in an amount not to exceed
the number of Vested Shares less the number of shares previously acquired upon
exercise of the Option.  In no event shall the Option be exercisable
for more shares than the Number of Option Shares, as adjusted pursuant to
Section 6 of the Plan.

     

    1.2          Method of
Exercise.  The Option shall be exercised by written notice to
the Corporation by the Optionee (or successor in the event of death) as such
written notice may be amended by the Board from time to time.  In
the event the Option shall be exercisable by any person other than the Optionee,
the required notice under this Section 1.2 shall be accompanied by
appropriate proof of the right of such person to exercise the
Option.

     

    1.3          Medium and Time of
Payment.  The Option Exercise Price shall be payable in full on
or before the Option exercise date by certified or bank cashier’s
check.

     

    1.4          Incentive Stock
Options.  If designated in the Grant Notice as an Incentive
Stock Option, this Option is intended to qualify as an Incentive Option (as
defined in the Plan).  Nonetheless, to the extent that it exceeds the
$100,000 rule of Code Section 422(d), this Option shall be treated as a
Non-Qualified Stock Option (as defined in the Plan).

     

    1.5          Tax Withholding.

     

    (a)           Withholding
Taxes.  Notwithstanding anything else to the contrary in this
Option Agreement, the exercise of the Option shall be conditioned upon payment
by Optionee in cash, or other provisions satisfactory to the Board, of all
local, state, federal or other withholding taxes applicable, in the Board’s
judgment, to the exercise or to later disposition of Stock acquired upon
exercise of the Option.

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    (b)           Withholding in
Securities.  The Corporation may, in its discretion, permit or
require Optionee to satisfy all or any portion of the tax obligations related to
the Option by deducting from the shares of Stock otherwise deliverable to
Optionee in settlement of the Option a number of shares of Stock having a fair
market value, as determined by the Corporation as of the date on which the tax
obligations arise, not in excess of the amount of such tax obligations
determined by the applicable withholding rates.  In the event that the
Corporation determines that the tax obligations will not be satisfied by the
method described above, Participant authorizes the designated plan administrator
or any successor plan administrator, to sell a number of shares of Stock that
are purchased under the Option, which the Corporation determines is sufficient
to generate an amount that meets the tax obligations plus additional shares of
Stock, as necessary. To account for rounding and market fluctuation, and to pay
such tax withholding amounts to the Corporation.  The shares of Stock
may be sold as part of a block trade with other optionees of the Corporation in
which all Optionees receive an average price.  Any adverse
consequences to Optionee resulting from the procedure permitted under this
Section 1.5, including, without limitation, tax consequences, shall be the sole
responsibility of Optionee.

     

    (c)           Notice of
Disqualifying Disposition of Incentive Option Shares. If the Option granted to
Optionee herein is an Incentive Option, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the Incentive Option on or
before the later of (1) the date two years after the Date of Grant, or (2) the
date one year after the date of exercise, the Optionee shall immediately notify
the Corporation in writing of such disposition.  Optionee agrees that
Optionee may be subject to income tax withholding by the Corporation on the
compensation income recognized by the Optionee.

     

    (d)            Consultation.  Optionee
hereby acknowledges that he or she understands that Optionee may suffer adverse
tax consequences as a result of Optionee’s exercise of the Option or disposition
of the shares of Stock.  Optionee hereby represents that Optionee has
consulted with any tax consultants Optionee deems advisable in connection with
the exercise of the Option or disposition of the shares of Stock and that
Optionee is not relying on the Corporation for any tax advice.

     

    1.6          Fractional
Shares.  The Corporation shall not be required to issue
fractional shares upon the exercise of the Option.

     

    
      	
              2.

            	
              NONTRANSFERABILITY
      OF THE OPTION.

            

    

     

    Options
granted under this Option Agreement may not be sold, pledged, assigned or
transferred in any manner other than by will or by the laws of intestate
succession, and may be exercised during the lifetime of the Optionee only by
such Optionee.  Any transfer in violation of this Section shall
void the Option.  No Option shall be pledged or hypothecated in any
way, nor shall the Option be subject to execution, attachment or similar
process.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    
      	
              3.

            	
              TERMINATION
      OF THE OPTION.

            

    

     

    The
Option shall terminate and may no longer be exercised after the first to occur
of (a) the close of business on the Option Expiration Date, (b) the close of
business on the last date for exercising the Option following termination of the
Optionee’s service as described in Section 5, or (c) a Capital Transaction to
the extent provided in Section 6 of the Plan.

     

    
      	
              4.

            	
              EFFECT
      OF TERMINATION OF SERVICE.

            

    

     

    4.1          Option
Exercisability.  The Option shall terminate immediately if
Optionee ceases to be employed by the Corporation, is no longer an officer or
member of the Board and no longer performs services for the Corporation for any
reason (collectively referred to as “Services”)
to the extent that it is then unvested and shall be exercisable after Optionee’s
termination of Service to the extent it is then vested only during the
applicable time period as determined below and thereafter shall
terminate.

     

    (a)           If
Optionee ceases to perform Services for the Corporation for any reason (other
than for “cause,” as hereinafter defined, or such Optionee’s death), any vested
Option granted hereunder to Optionee shall expire three (3) months after the
date the occurrence giving rise to such termination of eligibility (or 1 year in
the event an optionee is “disabled,” as defined in Section 22(e)(3) of
the Internal Revenue Code of 1986, as amended (the “Code”) or
upon the date it expires by its terms, whichever is earlier.  This
Option shall expire as to any shares that have not vested in the Optionee as of
the date of such termination.  The Board shall, in its sole and
absolute discretion, decide, using the provisions set forth in Treasury
Regulations Section 1.421-7(h), whether an authorized leave of absence or
absence for military or governmental service, or absence for any other reason,
shall constitute termination of eligibility for purposes of this
Section.

     

    (b)           If
Optionee ceases to performs Services for the Corporation, and such termination
is as a result of “cause,” as hereinafter defined, then all Options granted
hereunder to such Optionee shall expire on the date of the occurrence giving
rise to such termination of eligibility or upon the date it expires by its
terms, whichever is earlier, and such Optionee shall have no rights with respect
to any unexercised Options.  For purposes of this Option Agreement,
“cause” shall mean an Optionee’s personal dishonesty, misconduct, breach of
fiduciary duty, incompetence, intentional failure to perform stated obligations,
willful violation of any law, rule, regulation or final cease and desist order,
or any material breach of any provision of this Option Agreement or any
employment agreement.  The Board shall have complete discretion and
authority to determine whether the termination of the Optionee is for
cause.

     

    (c)           Death of Optionee
and Transfer of Option.  In the event Optionee shall die, a
vested Option may be exercised (subject to the condition that no Option shall be
exercisable after its expiration and only to the extent that the Optionee’s
right to exercise such Option had accrued at the time of the Optionee’s death)
at any time within six months after the Optionee’s death by the executors or
administrators of the Optionee or by any person or persons who shall have
acquired the Option directly from the Optionee by bequest or
inheritance.  Any Option that has not vested in the Optionee as of the
date of death or termination of employment, whichever is earlier, shall
immediately expire and shall be null and void.  No option shall be
transferable by the optionee other than by will or the laws of intestate
succession.

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

    4.2          Extension if Exercise Prevented by
Law.  Notwithstanding the foregoing other than termination of
Service for Cause, if the exercise of the Option within the applicable time
periods set forth in Section 4.1 is prevented by the provisions of Section 7,
the Option shall remain exercisable until the later of (a) thirty (30) days
after the date such exercise first would no longer be prevented by such
provisions or (b) the end of the applicable time period under Section 4.1, but
in any event no later than the Option Expiration Date.

     

    
      	
              5.

            	
              RIGHTS
      AS A STOCKHOLDER, DIRECTOR, EMPLOYEE OR CONSULTANT.

            

    

     

    Optionee
shall have no rights as a stockholder with respect to any shares covered by the
Option until the date of the issuance of the shares for which the Option has
been exercised (as evidenced by the appropriate entry on the books of the
Corporation or of a duly authorized transfer agent of the
Corporation).  No adjustment shall be made for dividends,
distributions or other rights for which the record date is prior to the date the
shares are issued (except to the extent, if any, provided in Section 6 of the
Plan).  If Optionee is an employee, Optionee understands and
acknowledges that, except as otherwise provided in a separate, written
employment agreement between Corporation and Optionee, Optionee’s employment is
“at will” and is for no specified term.  Nothing in this Option
Agreement shall confer upon Optionee any right to continue in the service of the
Corporation or interfere in any way with any right of the Corporation to
terminate Optionee’s service as a director, an employee or consultant, as the
case may be, at any time.

     

    
      	
              6.

            	
              RESTRICTIVE
      LEGENDS.

            

    

     

    The certificates representing the Stock
issued upon exercise of the Options granted pursuant to this Option Agreement
will bear any legends required by applicable securities laws as determined by
the Board.

     

    
      	
              7.

            	
              SECURITIES
      LAWS COMPLIANCE.

            

    

     

    Notwithstanding anything contained
herein, the Corporation shall not be obligated to  sell, issue or
effect any transfer of any Stock unless (i) such grant, sale, issuance or
transfer is at such time effectively registered or exempt from registration
under the Securities Act of 1933, as amended (the “Act”), (ii) the shares shall
have been listed (or authorized for listing upon official notice of issuance)
upon each stock exchange, if any, on which the Stock may then be listed and
(iii) the grant, sale and/or issuance complies with all other applicable
laws, regulations, rules and orders which may then be in effect.  As a
condition to exercise of any option, each optionee shall make such
representations as may be deemed appropriate by counsel to the Corporation for
the Corporation to use any available exemption from registration under the Act
or qualification under any applicable state securities law.

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

    
      	
              8.

            	
              MISCELLANEOUS
      PROVISIONS.

            

    

     

    8.1          Termination or
Amendment.  The Board may terminate or amend the Option at any
time; provided, however, that except as provided in Section 6 of the Plan in
connection with a Capital Transaction, no such termination or amendment may
adversely affect the Option or any unexercised portion hereof without the
consent of Optionee unless such termination or amendment is necessary to comply
with any applicable law or government regulation, including, but not limited to
Section 409A of the Code.  No amendment or addition to this Option
Agreement shall be effective unless in writing.

     

    8.2          Compliance with Section
409A.  The Corporation intends that income realized by Optionee
pursuant to this Option Agreement will not be subject to taxation under Section
409A of the Code.  The provisions of this Option Agreement shall be
interpreted and construed in favor of satisfying any applicable requirements of
Section 409A of the Code.  The Corporation, in its reasonable
discretion, may amend (including retroactively) the Option Agreement in order to
conform to the applicable requirements of Section 409A of the Code, including
amendments to facilitate Optionee’s ability to avoid taxation under Section 409A
of the Code.  However, the preceding provisions shall not be construed
as a guarantee by the Corporation of any particular tax result for income
realized by Optionee pursuant to this Option Agreement.  In any event,
the Corporation shall be responsible for the payment of any applicable taxes on
income realized by Optionee pursuant to this Option Agreement.

     

    8.3          Binding
Effect.  Subject to the restrictions on transfer set forth
herein, this Option Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective heirs, executors, administrators,
successors and assigns.

     

    8.4          Integrated
Agreement.  The Plan, Grant Notice and this Option Agreement,
together with any employment, service or other agreement with Optionee and
Corporation referring to the Option, shall constitute the entire understanding
and agreement of Optionee and the Corporation with respect to the subject matter
contained herein or therein and supersede any prior agreements, understandings,
restrictions, representations, or warranties among Optionee and the Corporation
with respect to such subject matter.  To the extent contemplated
herein or therein, the provisions of the Plan, the Grant Notice and the Option
Agreement shall survive any exercise of the Option and shall remain in full
force and effect.

     

    8.5          Applicable
Law.  This Option Agreement shall be governed by the laws of
the State of California as such laws are applied to agreements between
California residents entered into and to be performed entirely within the State
of California.

     

    8.6          Counterparts.  The
Grant Notice may be executed in counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

    8.7          Construction.  Captions
and titles contained herein are for convenience only and shall not affect the
meaning or interpretation of any provision of this Option
Agreement.  Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the
singular.  Use of the term “or” is not intended to be exclusive,
unless the context clearly requires otherwise.

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

    Optionee:
___________________________

    

    Date:
___________________________

    

    STOCK
OPTION EXERCISE NOTICE

    

    PATIENT
SAFETY TECHNOLOGIES, INC.

    Attention:
________________

    ________________________

    ________________________

    

    Ladies
and Gentlemen:

    

    1.           Option.  I was granted an
option (the “Option”) to purchase shares of the
common stock (the “Shares”) of Patient Safety
Technologies, Inc. (the “Corporation”) pursuant to the
Corporation’s 2009 Stock Option Plan (the “Plan”), my
Notice of Grant of Stock Option (the “Grant
Notice”) and my
Option Agreement (the “Option
Agreement”) as
follows:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      Date
      of Grant:

                                    	 	 
      	 	 
      	 
	 
      	 	 
      	 	 
      	 
	
                                      Number
      of Option Shares:

                                    	 	 
      	 	 
      	 
	 
      	 	 
      	 	 
      	 
	
                                      Exercise
      Price per Share:

                                    	 	
                                       

                                    	 $	 
      	 

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    2.           Exercise
of Option.  I hereby elect to
exercise the Option to purchase the following number of Shares, all of which are
Vested Shares, in accordance with the Grant Notice and the Option
Agreement:

    

    
      
        
          	Total Shares Purchased:	 	 
      	 	 
      	 
	 
      	 	 
      	 	 
      	 
	Total Exercise Price (Total Shares X Price
      per Share)	 	
                   

                	 $	 
      	 

        

      

    

     

    3.           Payments.  I enclose payment
in full of the total exercise price for the Shares in the following form(s), as
authorized by my Option Agreement:

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          	
                                  Ô  Cash:

                                	 	
                                   

                                	 $	 
      	 
      
	 
      	 	 
      	 	 
      	 
      
	
                                  Ô  Check:

                                	 	
                                   

                                	 $	
                                    

                                	 
      

                        

                      

                    

                  

                

              

            

          

        

      

    
 

    
      
         

      

      
        1

        
          

        

      

      
         

      

    

    4.           Tax
Withholding.

    

    
      	
               
      

            	
              Ô

            	
              I
      authorize payroll withholding and otherwise will make adequate provision
      for the federal, state, local and foreign tax withholding obligations of
      the Corporation, if any, in connection with the
  Option.

            

    

    

    Ô      I
enclose payment in full of my withholding taxes, as follows:

    

    (Contact
Plan Administrator for amount of tax due.)

    

    
      	
              Ô  Cash:

            	 	
               

            	 $	 
      	 
      
	 
      	 	 
      	 	 
      	 
      
	
              Ô  Check:

            	 	
               

            	 $	
                

            	 
      

    

     

    5.           Participant
Information.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      My
      address is:

                                    	 
      
	  	 

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
          
            
              
                	
                        My
      Social Security Number is:

                      	 
      

              

            

             

          

        

      

    

    6.           Binding Effect.  I
agree that the shares of Stock are being acquired in accordance with and subject
to the terms, provisions and conditions of the Plan, the Grant Notice and the
Option Agreement, to all of which I hereby expressly assent.  This
Agreement shall inure to the benefit of and be binding upon my heirs, executors,
administrators, successors and assigns.

    

    I understand that I am purchasing the
Shares pursuant to the terms of the Plan, the Grant Notice and Option Agreement,
copies of which I have received and carefully read and understand.

    

    
      
        
          	 
      	
                  Very
      truly yours,

                
	 
      	 
      
	      	
                   

                
	 
      	
                  (Signature)

                

        

      

    

    

    Receipt
of the above is hereby acknowledged.

    

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    PATIENT
      SAFETY TECHNOLOGIES, INC.

                                  	 
	 
      	 
      	 
	
                                    By:

                                  	 
      	 
	 
      	 
      	 
	
                                    Title:

                                  	 
      	 
	 
      	 
      	 
	
                                    Dated:

                                  	 	 
      	 

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

      

      
        2

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